Japan's government has already approved a set of bills wanting the recognition of virtual currencies like bitcoins to function the same as real money. With that, the government is also preparing to start taxing transactions involving bitcoins and other virtual currencies.
According to the Financial Newspaper Nikkei via Reuters, the guidelines proposed by the Japanese cabinet will seek for defining the virtual currency as a commodity rather than a currency. Unlike the traditional money, bitcoin is considered a digital currency that is bought.
It is also sold on a peer-to-peer computer network independent of central control. Moreover, the total value of the entire bitcoins produced over the past year was about $7 billion. The following transactions will allegedly be subjected to tax, meaning there will be gains from trading bitcoins on online exchanges.
The new rules are also expected to ban banks from handling bitcoins and restrict security firms from brokering bitcoin trades. The regulations are expected to be written as to be applied to similar currencies in the future.
Just last week, U.S. Federal Reserve Chair Janet Yellen stated that the U.S. Congress should also consider regulating virtual currencies, including bitcoins, as claimed by ASIA TIMES. The latest proposals are just an effect by Japan's government in the wake of the collapse of Mt. Gox, which was once considered as the world's largest bitcoin exchange.
Mt. Gox filed for bankruptcy protection, claiming that it may have lost 850,000 bitcoins following an act of hacking into its computer system. The total value of the loss is about half a billion dollars.
BRAVE NEW COIN also reported that in order to prevent the money laundering caused by virtual currencies, and offer additional protection of virtual currency users in the future, another set of provisions is focused on registration and regulation of exchanges that deal in any virtual currency. They would also recommend placing the virtual currency under the wing of the Japanese Financial Services Agency or the FSA.
Meanwhile, other countries have been opposing the idea of using virtual currency. One of the countries which strongly oppose bitcoin is Russia. It warned against the use of bitcoin, saying treating it as parallel currency is illegal.
