AUSTRALIA has emerged as the surprise world leader in digital currency after the Turnbull Government revealed plans to reduce tax on Bitcoin transactions and create ways to test other intangible currency in the country.

The announcement came the day after Brisbane computer scientist Craig Wright publicly revealed himself as the currency’s creator, putting Australia at the centre of the controversial cryptocurrency.

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The Federal Government formally announced plans for a Bitcoin tax change as part of a $200,000 financial technology commitment, announcing it would “introduce changes to the GST to ensure that consumers are no longer double taxed when using digital currencies such as Bitcoin”.

media_camera Australian entrepreneur Craig Wright, who was long-rumoured to be associated with Bitcoin, publicly identified himself as the digital currency’s creator this week. Picture: BBC News via AP

The Australian Taxation Office had previously ruled Bitcoin was an “intangible asset” that should attract goods and services, capital gains and fringe benefits taxes.

The simplified 10 per cent tax on Bitcoins, as recommended by the Senate Economics References Committee last year, was designed to “encourage the exploration” of digital currency technology.

Budget papers also revealed the Australia Securities and Investment Commission would investigate how to create a “regulatory sandbox exemption” to allow financial technology products to be tested in Australia, and the CSIRO would conduct a pilot and a study into blockchain — the technological backbone of currencies including Bitcoin.

media_camera The Bitcoin industry is reportedly worth more than $14 billion globally. Picture: AP

“This policy will encourage the development and refinement of new FinTech products and services in the Australian market,” Budget papers said.

Bitcoin, created in 2008, is the world’s most popular digital currency, even spawning Bitcoin ATMs across the world.

Encrypted records are used to validate the currency, so Bitcoins can be transferred but cannot be spent more than once, and the industry is currently estimated to be worth more than $14 billion.

The currency’s lack of governmental regulation has led to controversy, however, with Bitcoin the choice for criminal hackers issuing ransomware and commonly used to buy illegal drugs on the Dark Web.

Former Brisbane-based computer scientist Craig Wright publicly admitted to creating the cryptocurrency on Monday after years of speculation that he was the founder, previously only known by the pseudonym Satoshi Nakamoto.

The 45-year-old former Padua College and Charles Sturt University student, who is now said to be based in London, convinced some Bitcoin contributors of his claim to the title of founder, though others remained sceptical about his role in its creation.