The regulatory status of Bitcoin in many nations has been inconclusive until now. As the digital currency gains increased prominence, the lack of regulation is more detrimental than beneficial to bitcoin and bitcoin-based businesses. Without a clear understanding of what is allowed and what is not allowed in a country, companies or developers cannot create innovative products capable of solving various problems affecting the region.
The issue regarding the lack of regulations may soon be solved in few countries as they plan to introduce Bitcoin regulations. The latest country to be included in this list is Japan. The latest report from the Japanese Financial Services Agency, Nikkei states that the country will soon be working on introducing revised financial regulations that will consider digital currencies on par with other currencies.
Currently, Japan recognizes bitcoin as a financial object, but it doesn’t enjoy the same privileges as fiat currencies. The new regulations, to be proposed soon in the Japanese Parliament – Diet if approved, will elevate bitcoin to the same status as fiat currencies in the country. It is a good news for bitcoin users as the digital currency will be subjected to regulatory oversight with the extension of customer protection.
Nikkei report states that the use of bitcoin for P2P money transfer, making payments for goods and services, exchanging bitcoin for fiat currency and bitcoin trading will be included in the proposed definition of digital currency. By offering a legal status to bitcoin, the government will be able to watch over the digital currency. At the same time bitcoin developers, users and businesses can carry on with their business knowing what can be and can’t be done with bitcoin.
Japan has already experienced the worst case scenario after the collapse of Mt Gox. These regulations will also prevent the possibility of bitcoin being used to fund terrorist activities.