Financial regulators in Japan proposed the recognition of cryptocurrencies like Bitcoin as legitimate methods of payment on par with fiat money.

1. teamsteverhyner.com http://www.teamsteverhyner.com/japan-may-recognize-bitcoin-as-legitimate-currency/
Steven L.
Rhyner
Japan May Recognize Bitcoin as Legitimate Currency
Financial regulators in Japan proposed the recognition of cryptocurrencies like Bitcoin as legitimate methods of
payment on par with fiat money.
On the 23rd of February the Financial Services Agency of Japan submitted legislative revisions that would see
Bitcoin and other virtual currencies recognized as legitimate currencies.
This has come about as a result of realizing that virtual currencies essentially fulfill the nation’s definition of the
functions of a currency.
Exchanges will need to register
Currently, virtual currencies are recognised as ‘objects’, as such they do not have the same status and are not

2. treated the same as fiat currencies. It also means that they are not subject to any regulation by the Japanese
authorities or otherwise.
The submission date for these changes has been set as the current ordinary ‘Diet’ session. The hope is that these
changes will be passed before the current term ends. However, the predicted result of the decision is mostly
unknown.
If the new proposed definition passes, virtual currencies must serve as a medium of exchange, i.e. they can be used
for the purchase of goods and services. Those who choose to do so must also be able to exchange the virtual
currencies for legal tender through purchases or trades with an unspecified partner.
All institutions that deal in the business of virtual currencies, i.e. all exchanges and bitcoin businesses, would need to
register with the Financial Services Agency to ensure tighter oversight from the agency over the virtual economy.
Consumer Protection
Mostly this has come about as a result of the 2014 collapse of the world’s largest bitcoin exchange at the time,
Mt.Gox, as it greatly exposed the lack of consumer protection in the industry and highlighted other issues
consumers had been having with missing funds despite deposits.
The hope is that these steps will create a legal framework upon which virtual currencies will be able to spread more
quickly and safely, that there will be strengthened consumer protection, and spurred growth in the virtual economy
and the financial technology sector.
“Right way to go”
Tomonori Kanda, a financial affairs
official at the governing Liberal Democratic party, said:
“There is a long way to go…But we have discussed reform and believe it is the right way to go.”
Another Financial Services Agency official in Tokyo echoed Mr Kanda’s statement, but chose to remain anonymous
on account of the sensitive nature of the subject:
“We have not decided anything yet…The way things work here is that any change would have to be
approved by parliament first, and then we would work on writing the legislation.”
Oleg Khovayko, lead developer at Emercoin, spoke to CoinTelegraph and offered his opinion on the proposed
legislation:
“Any way of legitimization is good, since it will make definitions and transparent rules for crypto-
related business.”
However, he also added that he feels that it is not important whether cryptocurrencies are treated as currencies, as

3. is proposed in Japan, or as commodities, as is the case in the US. He feels that it is more important that
governments show the correct manner in which cryptocurrencies should be treated, thereby allowing for correct
accounting of these assets.
Re-posted from www.cointelegraph.com February 26, 2016 by Charlie McCombie
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