Bitcoin rising: are any readers using this virtual currency?
An earlier post informed us that Scotland’s David Low had decided to buy control of Scotcoin, which uses the same public database ‘blockchain’ technology as bitcoin. The USA has classified virtual currency as an asset for tax purposes and Israel has issued a draft which considers Bitcoin an asset, imposing VAT and capital gains tax on bitcoin transactions.
Now Japan has officially recognized bitcoin. New legislation that legitimizes digital currencies came into effect today (Saturday 1st April). The country’s financial regulator says bitcoin is fulfilling the function of a currency. More information on how it works is given here and about its advantages and disadvantages here.
The first bill containing provisions for virtual currencies including Bitcoin, submitted to the Diet last March, amends the existing Payment Services Act and the Act on Preventing of Transfer of Criminal Proceeds. It defines virtual currencies including bitcoin and imposes certain regulations on virtual currency exchange services in order to prevent money laundering and terrorist financing as well as to protect users.
Ken Kawai of Anderson Mori & Tomotsune, a leading Japanese law firm confirmed that though Bitcoin is not considered a currency, being recognized by the government as a payment method will “likely have a positive effect on people’s mind and facilitate usage of VC’s [virtual currencies]”.
Japanese exchange Coincheck has revealed that its user base has risen from 14,000 users last April to 76,400 in January and there was rapid growth in the number of bitcoin-accepting merchants using its service. Japanese giant GMO Internet group has recently announced that it would be developing a bitcoin exchange and wallet service. Japan now has the second-largest bitcoin trading volume globally, according to Coinhills.