I've also been pondering this question...
In Australia, the profits from crypto are treated the same as shares as opposed to currency. This means that you are taxed on any capital gains you make at 25%. I see this being a massive issue down the track when early adopters are trying to convert their crypto back to fiat for whatever reason.
There are a couple of service that let you pay bills with crypto, and some which allow for meetings in real life to exchange for cash, but there is no simple solution to cash out into fiat. All exchanges will require you to register your personal details and the electronic funds transfer into your bank account is a digital footprint that the government and tax agency can audit...
Where does 25% come from? I thought CGT was calculated on your marginal tax rate. Thanks.
Hmm sorry, I think I meant to say I think there is a 50% discount and the remainder is calculated at the individuals marginal tax rate...
Ok. That makes more sense. My understanding of CGT is if you hold an asset for >12 months you get the 50% discount on your marginal tax rate. If <12months you pay the full marginal tax rate.
Yeah that's right but I think a lot of people will be upset with their capital gains made in crypto when they try to convert back to AUD in the near future... If you check out these guys at living room of satoshit you can pay your Bpay bills with Crypto avoiding the tax issue... They are currently limiting payments to $1000 AUD per day but I think they are on to something.