Japan looks to regulate Bitcoin in wake of MtGox collapse

medium_10680057786The clouds that have been hanging over MtGox might just have a silver lining for Bitcoin enthusiasts. While plenty are still pissed that the exchange shut up shop, taking all of their Bitcoins with it, its closure seems to have prompted Japan to take the cryptocurrency seriously at last. Now, reports are suggesting that Japan is about to become the first nation to officially recognize, regulate and tax Bitcoin.

Japan’s finance ministry and national tax agency are reportedly looking at ways in which they can govern Bitcoin transactions, reports Nikkei. According to the report, Japanese officials believe that Bitcoin transactions should be taxed in line with the country’s corporate tax and consumption laws, though the report failed to cite any sources.

If Japan goes ahead with this, it would mean that Bitcoin being treated like a commodity such as gold, rather than as a currency. This means that any money made from trading Bitcoin online could could also be taxed, says the Nikkei Asian Review.

This approach is quite the opposite of what’s happening in the US, at least for now. Earlier this week, Federal Reserve Chairwoman Janet Yellen publicly stated that the Fed is unable to regulate Bitcoin because the cryptocurrency is separate from the banking system. However, she did recommend that Congress look into the issue and establish some kind of overseeing committee, which means we could one day see some kind of regulations or guidance being issued.

With the collapse of MtGox, some governments might feel that it’s necessary to introduce regulations to govern the cryptocurrency. The Tokyo-based exchange suddenly took its website offline last week following weeks of uncertainty that began when it halted all Bitcoin and fiat withdrawals. On Friday, it finally broke its silence over its problems, filing for bankruptcy and stating that it had been hacked with more than 750,000 Bitcoins stolen.

MtGox’s troubles took their toll on Bitcoin’s value and saw it drop to a low of $430 last week. Since then, the market has recovered somewhat with one Bitcoin now valued at $661.80, according to the weighted average across multiple exchanges at Bitcoinaverage.com.

photo credit: btckeychain via photopin cc

About Mike Wheatley

Mike loves to talk about Big Data, the Internet of Things, Hacktivists and hacking, but he also hates Google and can never resist having a quick dig at them should the opportunity arise :) Got a REAL news story or tip? Email Mike@SiliconANGLE.com.