Cryptocurrency Security: Australian govt. takes steps in user regulation

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One of the issues facing many countries now is how best to regulate the increasing use of digital currencies. In Australia, the government is taking steps to ensure users of cryptocurrencies pay their share of taxes -- and use them legally. Greg Navarro has more.

When Fred Schebesta looks at the value of digital currencies, the co-founder of global brokerage Hive-Ex sees enormous potential.

FRED SCHEBESTA CO-FOUNDER, HIVE-EX "It's not going anywhere, this thing is about to get bigger and bigger."

The Australian Government is also looking at the increasing use of cryptocurrencies. It estimates that up to one million Australians have invested in crypto-assets. Australia is among a global effort to try and regulate their use.

ADRIAN LEE SENIOR LECTURE, UNIVERSITY OF TECHNOLOGY SYDNEY "They don't want to completely ban cryptocurrencies, there is some innovation in there, they don't want to completely remove that sector."

The Australian Taxation Office is in the process of ensuring that users adhere to tax guidelines. The ATO is also concerned with the illegal use of cryptocurrencies -to do things such as move funds within the black economy, and hide money offshore.

ADRIAN LEE SENIOR LECTURE, UNIVERSITY OF TECHNOLOGY SYDNEY "That's the main fear, it is crime and also the use for terrorism in Australia."

GREG NAVARRO SYDNEY "It also says it is working with a global tax enforcement effort aimed at investigating cryptocurrency-related tax evasion and money laundering."

FRED SCHEBESTA CO-FOUNDER, HIVE-EX "All currencies have a degree of black market transactions. Cash is probably the number one system today where money is laundered and there have been several banking institutions of late where this has been a major concern for them."

Schebesta welcomes the push to better regulate the use of digital currencies.

FRED SCHEBESTA CO-FOUNDER, HIVE-EX "It brings about more legitimacy and it makes it more transparent and it makes this use case even better and better over time."

He also sees the increasing effort to regulate cryptocurrencies as an acknowledgement of their value - not just financially, but as a technology and method of transaction that will continue to grow. Greg Navarro, CGTN, Sydney.