For Australian Bitcoin holders, the tax bill attached to selling has long been the single biggest barrier to accessing the wealth held in their BTC. Years of holding, often through significant drawdowns, have produced paper gains that would convert into a material CGT liability the moment the asset is sold. Even with the 50% CGT discount for assets held longer than twelve months, the remaining liability can be the difference between a clean outcome and a deeply inefficient one.
In October 2025, Vield obtained a Private Binding Ruling from the Australian Taxation Office confirming that under Vield’s specific loan arrangement, depositing Bitcoin as collateral does not trigger a CGT event for the borrower. The ruling (Authorisation Number 1052452380351, dated 27 October 2025) is the first ATO ruling of its kind on crypto-backed loans, and the first application of section 106-60 of the ITAA 1997 to a crypto product. To date, Vield is the only crypto lender in Australia with an ATO confirmation of this kind.
The mechanism
Under ordinary CGT principles, transferring an asset to another party can look like a disposal under CGT event A1. For long-term Bitcoin holders, that interpretation would mean borrowing against BTC required first crystallising substantial gains, often defeating the point of borrowing in the first place.
Section 106-60 of the tax law provides a carve-out where an asset is vested in another entity for the purpose of enforcing, giving effect to, or maintaining a security, and where that security remains over the asset. In plain terms, if a borrower transfers an asset purely to secure a debt, not to sell it or give it away, the law is intended to treat the transfer as if it never happened for CGT purposes.
The ATO confirmed in the ruling that section 106-60 applies to Vield’s specific arrangement. The features the ATO accepted include segregated custody (the borrower’s BTC is held in a wallet uniquely associated with that borrower, not pooled), no rehypothecation (Vield has no right to use, transfer, or redeploy the collateral during the loan term), the ability to register a PPSA charge, and loan documentation that expressly states the transfer is for security purposes.
Where it fits
Long-term holders with meaningful unrealised gains. For a holder who bought five or more years ago, the crystallisation cost of selling can run into hundreds of thousands of dollars. A Bitcoin-backed loan with Vield provides access to AUD without a CGT event at the point of deposit.
Holders managing the timing of realisation. Some borrowers have visibility into a future year where their taxable income will be materially lower. A Bitcoin-backed loan with Vield avoids the CGT event today while leaving any future sale on the borrower’s own timeline.
Holders with no intention of exiting. Not every borrower wants to sell, ever. For those treating BTC as a long-term store of wealth, a Bitcoin-backed loan with Vield is how they access the productivity of the asset without unwinding the position.
A conversation from the desk
Chantra Hang, Sales Director at Vield, recently spoke with a borrower based in regional NSW who had acquired his Bitcoin position in 2017. He needed around $400,000 in AUD for a personal project and had been running the numbers on selling.
"He’d worked out that to actually net $400,000 after CGT, he’d need to sell a significantly larger position," Chantra said. "And he didn’t want to. He’d held through the 2018 drawdown, through 2022. The idea of selling now, and paying tax on gains he’d effectively earned through patience, didn’t sit right with him."
Chantra walked him through how a Bitcoin-backed loan with Vield would solve his specific scenario, including the implications of the ATO ruling. His deposit of BTC as collateral would not be treated as a disposal for CGT purposes under section 106-60. The loan would be settled in AUD. His BTC would be held in a segregated wallet by Vield’s custodian, with no rehypothecation rights.
"I always tell borrowers two things about the ruling," Chantra said. "It applies to our specific structure. And it applies to the deposit of the collateral, not to any future sale of the BTC. If you sell the BTC down the track, that’s still a CGT event at that point. The ruling is about the loan, not about selling."
The borrower engaged his accountant, confirmed how the loan would sit alongside his broader tax position, and proceeded. His cost base was preserved, his BTC stayed in his name, and the loan settled without triggering a CGT event on the deposit.
What borrowers should weigh up
The ruling addresses the deposit, not a future sale. If a borrower later sells BTC, that sale is a separate CGT event on its own facts. The ruling does not change the tax treatment of a future disposal.
A Private Binding Ruling is not a public ruling. The PBR binds the ATO in relation to Vield’s specific arrangement with the specific taxpayer who applied. It represents the ATO’s view, which may or may not be repeated in future rulings.
Tax treatment is individual. How a Bitcoin-backed loan interacts with a borrower’s tax position depends on their circumstances, the purpose of the loan, and the structures in play. That conversation belongs with a qualified tax adviser, not with the lender.
The value of the collateral still moves. The CGT position on the deposit is one thing. The volatility of the underlying asset is another. Borrowers need to be honest about whether they are comfortable carrying that exposure through the life of the loan.
A meaningful distinction
The ATO ruling is, to date, the only confirmation in Australia that a crypto-backed loan can be structured so that the deposit of collateral is not a CGT event. For long-term Bitcoin holders weighing their options, that distinction is the difference between a product that is economically viable and one that is not.
If you’re weighing up how a Bitcoin-backed loan with Vield might solve your unique scenario, the Vield team is available for a direct conversation. Bring your accountant into the process early. The right answer depends on your Bitcoin holdings, your broader tax position, and what you’re trying to achieve.
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