Taking security over gold under the PPSA: towards a 'currency' classification

Introduction (1)

Gold has long been regarded as a cornerstone of value preservation and a medium of exchange. Unlike Bitcoin, which has faced ambiguity under the Australian legal and taxation framework, gold benefits from recognition under the Currency Act 1965 (Cth) when minted as legal tender coins. However, under the Personal Property Securities Act 2009 (Cth) (PPSA), gold and silver bullion remain categorised as goods or intangibles rather than as currency.

This article explores how gold and similar monetary commodities should be treated under the PPSA and taxation laws, especially in light of recent judicial consideration of Bitcoin’s legal characterisation.

Gold as Goods versus Currency under the PPSA

Currently, under the PPSA, ‘personal property’ expressly excludes currency. While this exclusion clearly applies to Australian dollars and foreign fiat, it does not extend to gold bullion or coins. As such, gold is treated as goods (if tangible) or intangibles (if represented digitally). This classification is unsatisfactory when gold coins are already declared legal tender under the Currency Act 1965 (Cth).

For lenders, this means that taking security over gold or bullion coins requires a standard security agreement and registration on the PPSR, rather than benefiting from the simplified currency exclusion applicable to fiat money.

Comparative treatment with Bitcoin

The recent Victorian Magistrates’ Court decision in Wheatley v Commissioner of Taxation (2023)(2) held that Bitcoin should be treated as ‘money’ in the context of a confiscation proceeding. Although this decision is under appeal, it raises profound implications: if Bitcoin can be money for one statutory purpose, its broader characterisation may shift. The appeal is expected to consider whether Bitcoin is property or money; while money is technically a subset of property, the distinction determines whether Bitcoin is subject to capital gains tax (CGT) or excluded as currency.

Currency Act and CGT carve-outs

The Currency Act 1965 (Cth) designates certain bullion coins as legal tender. However, the Australian Taxation Office (ATO) treats these coins as ‘collectables’(3), subject to CGT with only a $500 exemption. By way of contrast, Bitcoin enjoys a $10,000 CGT personal use exemption. This inconsistency highlights the need for reform: if both Bitcoin and bullion coins can be used as mediums of exchange, their CGT treatment should be harmonised.

Medium of Exchange versus Collectable

The classification of bullion coins as collectables is increasingly artificial. Coins can and are used as currency: a vendor may accept gold coins in a property transaction, or a consumer may use silver coins for goods in the event of electronic payment system failure. The legal analysis should follow function: when used as a medium of exchange, coins are money, not collectables or mere investments.

Collateral and monetisation

Both Bitcoin and bullion coins are now monetised in commercial practice. They are pledged as collateral, traded in financial markets, and increasingly used as stores of value against which credit can be extended. Recognising them as currency under the PPSA would eliminate uncertainty in secured transactions and provide lenders with predictable rules.

Reform recommendations

To align legal treatment with economic reality, reforms are necessary:

• amend the Currency Act 1965 (Cth)(4) to clarify that bullion coins’ legal tender status reflects their market value, not their nominal face value.

• amend the PPSA to insert a ‘currency’ category encompassing: (a) fiat legal tender; (b) legal tender bullion coins; and (c) digital currencies such as Bitcoin (5).

• harmonise ATO treatment to exempt currency transactions from CGT regardless of whether the medium is physical (coins) or digital (Bitcoin).

Conclusion

The PPSA's exclusion of currency from the definition of personal property should extend to include both bullion and Bitcoin(6). The pending appeal in Wheatley will test the legal boundaries of Bitcoin's classification, but the broader policy imperative is clear: gold silver and Bitcoin function as money. Treating them as such will remove tax anomalies, promote commercial certainty and bring Australian law into step with global monetary practice.

1 Copyright 2025 HJ Fielder LLB, LLM (Melb), Grad Cert Prop & Plan (UTS, Syd), Grad Dip Law (Syd).

2 Wheatley v Commissioner of Taxation (Magistrates’ Court of Victoria, 2023) – decision currently under appeal.

3 Australian Taxation Office, ‘Guide to capital gains tax 2023’ – treatment of collectables vs personal use assets.

4 Currency Act 1965 (Cth), ss 9–11; examples of practical currency use.

5 Bank of International Settlements, Annual Report 2024 – collateralisation of digital assets and bullion.

6 Personal Property Securities Act 2009 (Cth), s 8(1)(d).