Japanese Government to Monitor Bitcoin to Prevent Illegal Transactions

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Japanese Government to Monitor Bitcoin to Prevent Illegal TransactionsJapanese government has vowed to track illegal bitcoin transactions, though it stopped short of announcing measures to regulate it.

The Ministry of Economy, Trade and Industry is looking to draft a strategy that will help it keep a close eye on illicit bitcoin transactions over fears that criminals may be using bitcoins for drug dealing and money laundering.

The ministry will cooperate with other ministries and agencies such as the National Police Agency and the Financial Services Agency. The government plans to consider bitcoin as a “value-added electronic record”, similar to a credit card, rather than as a currency, reported Kyodo.

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The government also plans to caution users that they are responsible for their own decision to trade using the virtual currency, though it revealed that it wouldn’t introduce harsher regulations that may disrupt the growth and quality of digital currencies. The government won’t also introduce capital gains tax, unlike in the U.S., though it will levy consumption taxes whenever a user buys the virtual currency, which will be viewed as an investment vehicle.

The Japanese Cabinet in March reached a resolution to view bitcoins as a non-currency market product just like precious metals. Currently, Japan has no laws to regulate the use of bitcoin. Tokyo, under pressure from lawmakers, has scrambled a special committee to research the bitcoin and how it can be regulated.

The committee recommended that Japan should instead let bitcoin thrive in order to attract foreign investment in order to boost the flagging economy.

Bitcoin, which exists solely in virtual form, has faced a lot of hurdles in its short history since it was created in 2009. In February, Japan-based Mt. Gox, once the world’s leading bitcoin exchange, collapsed after hackers stole its bitcoins, denting investor confidence in digital currencies. 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