Japan Says There is No Need to Regulate Bitcoin for Now

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Japan Says There is No Need to Regulate Bitcoin for NowJapan’s ruling Liberal Democratic Party has announced that it won’t draft new regulations on bitcoin for now after the recent implosion of the Tokyo-based Mt. Gox triggered demands for tighter control of the digital currency. Until its collapse in February in a hacking attack, Mt. Gox was the world’s largest bitcoin exchange.

The authorities said that there is no need to form an agency to regulate the virtual currency for now, instead saying that users should self-regulate it in order to promote its use.

“While we may need to be flexible in reviewing legislation in the future, we also have to have to stand back and allow this new sprout of industry to grow,” Wall Street Journal quoted Takuya Hirai, the head of LDP panel on information-technology strategy as saying on Thursday. Mr. Hirai however said that the final decision will be made after listening to more views about the matter.

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Electronic Record with Value

The panel also recommended that bitcoin should be treated as an electronic record with value, which classifies it as neither a commodity nor a currency, and said that certain bitcoin deals and capital gains should be taxed. Hence, goods bought using bitcoin should be charged for the 8 percent sales tax.

Owing to absence of regulation, most Japanese experts and bitcoin users have insisted that the Financial Services Agency is the best watchdog to supervise bitcoin. However, FSA distanced itself from the matter, saying bitcoin isn’t a recognized currency.

Regulators all over the world have been looking into how they can treat bitcoin. A panel of U.S. state regulators are presently drafting the first bitcoin regulation framework, which is meant to protect bitcoin users from fraud while still supporting the growth of the technology. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Deepak Tiwari at deepak@forexminute.com