The Digital Economy and Financial Services Minister has cautioned Australians against getting their salary paid in volatile cryptocurrencies, even as interest in digital coins surges.
Recent data from Finder.com.au found that 24 per cent of Australians would be willing to have their salary partly paid in Bitcoin.
But Minister Jane Hume said she “certainly wouldn’t want to be paid in cryptocurrency”, adding that there were tax burdens for those who earn returns on their crypto investments.
“How employees want to be compensated is essentially a discussion between them and their employer. But it doesn’t come without a cost,” Hume told 2GB.
“There’s a broader employment and tax framework and cryptocurrencies would be treated as a property, as a fringe benefit, so the employer is going to be taxed at 47 per cent.
“So it’s really not the best option for anybody that isn’t in the top income tax bracket.”
Australian law will apply to cryptocurrency investments just as it applies to any other asset class, Hume added.
She isn’t dissuading anyone from investing in crypto, but warned that “they are volatile” and “very very high risk”, which investors should be aware of.
“If you want to invest in Dogecoin or any other cryptocurrency, the Government’s not standing in your way – we want to make sure that personal opportunity and personal responsibility are very much two sides of the same coin.
“But they shouldn’t go into it with their eyes closed.”
Last week, China’s warning about a crypto crackdown and Elon Musk’s tweets about the environmental damage wiped 20 per cent off the global cryptocurrency market cap.
But Bitcoin’s prices have since rebounded amid more tweets from Musk outlining why he backs Dogecoin, and indicators that financial heavyweights such as Goldman Sachs and hedge fund billionaire Ray Dalio backed Bitcoin.
Some experts have signalled dips in the market represent opportunities to snap up cryptocurrencies while values are relatively low.