Cryptocurrency 108-26071749

Cryptocurrencies are online tokens which usually have no set value. The value of cryptocurrency is determined by the amount a person is willing to pay for it in the market.

People invest in cryptocurrency with the hope that the value of the asset will increase in the future, like shares in the stock market.

Common types of cryptocurrencies include:

• Bitcoin (BTC)
• Ethereum (ETH)
• Tether (USDT)
• USD Coin (USDC)
• Binance Coin (BNB)
• Binance USD (BUSD)
• Ripple (XRP)
• Cardano (ADA)
• Solana (SOL)
• Dogecoin (DOGE)
• Polkadot (DOT)

To determine the assessable value of a customer’s cryptocurrency asset, multiply the number of units the customer holds against the current market value for the event date.

Current and historical market values can be taken from any reputable Australian exchange such as Coinbase, CoinSpot or Kraken. If the customer has details of the exchange they purchased their cryptocurrency through, use this exchange to obtain the current market value.

The Resources page has links to some reputable Australian exchange websites.

The cryptocurrency market is volatile and listed values change throughout the day. Customers are not expected to advise of multiple changes throughout the day.

Customers should advise changes at a reasonable frequency such as fortnightly or monthly, where the value of their cryptocurrency is:

• trending consistently upward or downward over a longer period, and
• it is likely to impact their rate of payment

If a customer receives the maximum rate of payment and the value of their cryptocurrency is trending downward, they are not expected to advise of the change as this will not impact their payment.

Note: customers cannot make changes to the value of their cryptocurrency assets online due to restrictions within the online service.

Cryptocurrency is not included in the Social Security Act 1991 definition of financial investment. This means that deeming does not apply and actual income earned is assessed in the income test.

Customers can 'stake' their cryptocurrency assets to work in a blockchain network. In return for 'staking', they can receive rewards, including more of the cryptocurrency they are 'staking', like interest in a savings account.

Make sure that the asset value of the cryptocurrency received is updated on the customer’s record.

Note: money from the sale of cryptocurrency assets is not assessed as income.

See Process page > Table 3

Cryptocurrency is included in the assessment of LAWP. Manual calculation of the LAWP is required for customers with cryptocurrency, see Liquid Assets Waiting Period (LAWP).