Japan Considers Regulating Bitcoin as ‘Currency’ | A Welcome Move in FinTech Space?
Regulators of ‘The Land of the Rising Sun’ are planning to create a legal framework allowing virtual currencies to spread more safely.
According to a recent report from Nikkei, the country’s financial regulators have proposed treating virtual currencies as methods of payment equivalent to conventional currencies. At present, virtual currencies are recognized as “objects”, not equivalent to fiat currency.
“Under the FSA’s proposed definition, virtual currencies must serve as a medium of exchange, meaning that they can be used to purchase goods and services. They must also be exchangeable for legal tender through purchases or trades with an unspecified partner.”
Japan’s Financial Services Agency (FSA) believes such a definition will possibly help to develop the financial technology sector.
The proposed changes are expected to be submitted during the current legislative session of the Diet, Japan’s legislature, under which the virtual currency exchanges and related institutions would have to register with the FSA.
This tighter oversight could help prevent a scenario similar to the collapse of Japan-based bitcoin exchange Mt Gox in 2014.
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