Bitcoin Legal in Japan on April 1

Blockchain, FinTech, Investing, News, Regulation | March 31, 2017 By:

Bitcoin will be recognized in Japan as a legal form of payment starting April 1.

After months of contentious debate among lawmakers, bitcoin exchanges will now be characterized as payment instruments and fall under the purview of the country’s anti-money laundering rules.

New capital requirements for exchanges (a minimum of  JPY10 million (US$89,430) is required),  operations rules and enhanced security protocols must be in place at exchanges operating in Japan. Employees must also be given training in securities rules and undergo annual audits. The government’s Financial Services Agency (FSA) is in charge of regulating virtual currency exchanges and their operators.

Although bitcoin is still not considered a currency by Japan, it now falls into an area where it is considered an asset suitable for payment. That small distinction can be changed in the future. One possible issue: accountants have received no guidance on bitcoin or other cryptocurrency issues for tax purposes. The country’s accounting board is currently working on developing guidelines.