Japan has always been an interesting country as far as Bitcoin and digital currency are concerned. Even though the government never opposed Bitcoin to begin with, exchange platforms had to adhere to very strict regulatory guidelines, which hampered the growth in the country. Moreover, there was very little demand for alternative payment solutions, as cash is the dominating form of transferring value on a daily basis. But all of this is coming to change since Japan has set out to become one of the leaders in fintech and digital currency.
The history of Bitcoin in Japan
Bitcoin users will be all too familiar with the Mt. Gox debacle, which set an unwelcome precedent for digital currency in Japan. If there was one thing to take away from this dark period in digital currency history, it is how exchange platforms need to be monitored properly and obtain specific licenses to conduct their business as a money transmitter.
Moreover, the country has never looked at Bitcoin as a currency, instead labeling it as a commodity. While this status is more favorable in terms of regulation and taxation, it also makes it far less appealing to consumers and businesses in Japan. After all, people like to deal with currencies legal by law, and Bitcoin does not fit that category.
To make matters even more confusing, the Mt. Gox lawsuit—which is still ongoing as of writing—lead to a heavy debate as to whether or not local Bitcoin investors should be protected from Bitcoin exchange insolvency. A court ruling indicated how further investigation into this matter was warranted, and there is still no official resolution on the table.
With a dubious legal status, and being referred to as a commodity, the future of Bitcoin in Japan looked rather dire. Despite best efforts by companies such as BitFlyer and Coincheck to bring digital currency to consumers in the country, looming uncertainty made it a less favorable solution. After all, as long as there is a way to pay with cash in Japan, consumers will not be chomping at the bit to change their lifestyle.
A bright future for digital currency and fintech
But it looks like the entire situation in Japan will be changing over the coming months, as the country’s finance regulator wants to push fintech innovation over the coming years. Moreover, there are plans on the table to ease up on the regulation of digital currency exchanges, and Bitcoin would even be labelled as a currency come May 4.
However, if Bitcoin were to be deemed a legal currency in Japan, there will be an impact on how this digital currency is regulated in the future. Additionally, Bitcoin users will be taxed for using the digital currency, although the precise details elude us for the time being.
It is important to keep in mind any noteworthy change in either fintech or digital currency will need to be approved by Japanese parliament first, and vote is set to take place in early May this year. Although nothing has been set in stone just yet, there is a general buzz of excitement in the Bitcoin community as to how this will play out.