Australia is set to overhaul its capital gains tax system by replacing the longstanding 50% discount with inflation indexing, a move that could significantly impact cryptocurrency investors. The reform, expected to be formally submitted following the federal budget announcement on May 12, will apply to assets purchased after May 10, 2026, with full implementation by July 1, 2027. This change marks a return to the inflation-indexed model used prior to 1999. Under the new system, the cost base for calculating capital gains will adjust according to inflation, taxing investors on real rather than nominal gains. This shift is anticipated to increase the tax burden on holders of high-risk, high-yield assets like Bitcoin and Ethereum, particularly during bull markets. The Albanese government defends the reform as a means to boost fiscal revenue and address housing market pressures, estimating current tax concessions cost the budget A$20 billion annually. A mixed transition model will apply to assets purchased before the reform, partially retaining the 50% discount.