An estimated 716 million people owned cryptocurrency worldwide as of 2025. As crypto adoption increases in Australia and globally, businesses are increasingly considering whether and how to incorporate digital currencies. Working with digital currencies has regulatory and logistical implications, but it’s also a promising way to increase speed, lower costs, and expand reach.

Below, we explain how digital currency works in Australia, how it’s regulated, and how a business can adopt it responsibly.

What’s in this article?

• What is digital currency in Australia?
  
• What types of digital currency exist?
  
• How does digital currency work in practice?
  
• What does the digital currency landscape look like in Australia?
  
• How are Australian businesses currently using digital currency?
  
• How can an Australian company responsibly adopt digital currency?
  
• How Stripe Payments can help
  

What is digital currency in Australia?

Digital currency is money that exists only electronically. Rather than physical bills or coins, it takes the form of value recorded within digital systems. In Australia, the term usually refers to cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs), leaving out more typical electronic bank balances.

What types of digital currency exist today?

The category of digital currency encompasses many types of digital money. These different currencies are designed for different purposes and carry different risk profiles.

Here are the main types:

• Cryptocurrencies: Cryptocurrencies are decentralized digital assets that operate on public blockchains. They’re not issued or backed by governments; instead, their value is determined by market demand, and transactions are validated through network consensus mechanisms rather than through banks. Popular examples include Bitcoin and Ether.

• Stablecoins: Stablecoins are a type of cryptocurrency designed to maintain a stable value. They’re usually pegged one-to-one to a fiat currency and backed by reserves of cash or short-term government securities. This makes them less volatile than traditional cryptocurrencies and thus more practical for payments and settlement.

• Australian dollar-linked stablecoins: Some institutions in Australia have issued AUD-backed stablecoins for use in wholesale financial transactions. These pilot projects are testing whether stablecoins can reduce settlement times for complicated transfers. At the moment, adoption is limited and primarily institutional.

• Central bank digital currencies (CBDCs): A CBDC is a digital form of sovereign currency issued by a country’s central bank. It’s exchangeable one-for-one with that country’s physical currency and considered legal tender, unlike private cryptocurrencies. The Reserve Bank has piloted use cases for a potential digital Australian dollar involving interbank settlement and tokenized asset transactions between banks and financial institutions, but no decision has yet been made.

• Tokenized deposits and digital representations of assets: Some financial institutions are exploring tokenized bank deposits and other digital instruments that mirror traditional financial assets but run on blockchain infrastructure. These blur the line between crypto-native assets and regulated financial products.

How does digital currency work in practice?

Digital currency runs on distributed networks rather than central ledgers. It’s built to balance security with decentralisation.

Here’s how it works:

• Digital wallets store currency: Users store their digital currency in software or hardware wallets that have public addresses and hold private cryptographic keys. The private key proves ownership and authorizes transactions, while the public address functions the same way an account number does for receiving funds.

• The blockchain validates transactions: When a transaction is initiated, it’s signed with the sender’s private key and broadcast to a decentralized network. Independent validators confirm that the sender has sufficient funds and that the transaction is legitimate, then add it to the blockchain ledger.

• Settlement is irreversible: Once a transaction has been confirmed and recorded on the blockchain, it’s typically final. There’s no central authority to reverse it.

• Users pay network fees: Transactions come with a network fee, which is paid to validators. Fee amounts vary depending on network demand and the particular blockchain being used.

• Platforms or exchanges convert to fiat: Businesses often use payment platforms or exchanges to convert digital currency into Australian dollars. Some services handle this instantly, which shields businesses from exchange-rate fluctuations.

• Smart contracts can incorporate digital currency: Certain blockchains support programmable logic embedded directly into transactions. This enables automated escrow, conditional payments, subscription billing, and other structured financial flows without manual intervention.

What does the digital currency landscape look like in Australia?

Australia has taken a practical approach to digital currency regulation. These currencies are permitted, widely used, and increasingly supervised.

Here’s what to know:

• Legality: Digital currencies are legal to buy, sell, and hold in Australia, but they are not legal tender. The Reserve Bank of Australia has stated that crypto assets have no legislated backing or intrinsic value, and they are not officially recognized as currency.

• Tax treatment: The Australian Taxation Office treats most digital currencies as property rather than money. This means capital gains tax can apply when digital assets are sold, exchanged, or used for purchases. Businesses must record digital currency transactions in Australian dollar terms at the time they occur.

• Anti-money laundering requirements: Since 2018, digital currency exchange providers must register with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and comply with Anti-Money Laundering (AML) checks and counterterrorism financing obligations. These include customer identification, transaction monitoring, and reporting suspicious activity.

• Financial services laws: Digital currency activities that resemble traditional financial products fall under existing legislation, such as the Corporations Act. If a digital asset arrangement functions similarly to a managed investment scheme, derivative, or other regulated product, licensing and disclosure obligations might apply.

• Oversight and enforcement: Consumer protection and financial services laws apply to digital currencies. The Australian Securities and Investments Commission (ASIC) takes action against unlicensed digital currency offerings and misleading promotions.

• Ongoing policy reform: The federal government has conducted “token mapping” exercises and public consultations to clarify how digital assets should be regulated. Proposed reforms include a specific licensing framework for digital currency service providers, which is meant to strengthen consumer protection without restricting innovation.

How are Australian businesses currently using digital currency?

Right now, businesses in Australia are making and accepting payments in digital currency. They’re doing so to improve speed, cost, and reach.

Here are some use cases:

• Customer payments: Some Australian businesses allow customers to pay with cryptocurrencies such as Bitcoin or Ether. This typically happens through payment providers that convert the digital currency into Australian dollars immediately.

• Cross-border payments: Stablecoins are used for international settlement and cross-border payments. They allow for near-instant transfers outside traditional banking hours, and they can be less expensive than other payment forms.

• Institutional settlement: Australian financial institutions have tested Australian dollar–backed stablecoins for wholesale transactions. These experiments are still in the pilot stage.

• Treasury experimentation: Some crypto-native or technology-focused firms might hold digital assets on their balance sheets or use stablecoins for liquidity management.

How can an Australian company responsibly adopt digital currency?

Introducing digital currency can expand your financial toolkit, but it requires a deliberate adoption plan to use it safely.

Here’s how to do it:

• Start with a defined use case: Identify a specific problem that digital currency will solve for you. For example, you might focus on lowering cross-border settlement costs or enabling faster contractor payouts.

• Limit exposure to volatility: Cryptocurrencies can experience large price swings over short periods. If you decide to accept them, consider automatically converting into Australian dollars at the point of transaction. Using stablecoins can reduce the risk of price fluctuation, but treasury policies should clearly define holding limits and conversion timelines.

• Observe regulatory obligations: Digital currency transactions can trigger tax reporting, licensing, and AML obligations. Make sure you understand capital gains implications, AUSTRAC requirements, and any other applicable financial services licensing rules.

• Strengthen security controls: With digital currency, control of private keys equals control of funds. Decide whether you want to maintain custody of your digital assets (known as self-custody) or use a regulated third-party provider. Implement multifactor authentication, access controls, and approval workflows for any wallet-related activity.

• Integrate with finance and reporting systems: Make sure your accounting infrastructure can record digital asset transactions accurately in Australian dollars, and create disciplined reconciliation processes.

• Establish liquidity pathways: Maintain reliable ways to convert digital assets into fiat so you can keep paying your employees, your suppliers, and your taxes.

• Create a refund pathway: Blockchain payments are typically final. Define your refund processes, error handling, and customer support workflows before you start accepting digital currency payments.

• Communicate with stakeholders: While digital currency adoption is increasingly mainstream, businesses should align implementation with brand positioning and customer expectations. Internal teams, customers, auditors, and banking partners should understand why digital currency is being introduced and how you’re managing the associated risks.

• Make use of infrastructure providers: Payments providers such as Stripe help with the complexity of crypto acceptance, conversion, and compliance. Using an established payment infrastructure can reduce integration risk and simplify your workflow.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world. Businesses can accept stablecoin payments from almost anywhere in the world that settle as fiat in their Stripe balance.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs and access to 125+ payment methods, including stablecoins and crypto.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty, and grow revenue.

• Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.