Bitcoin Officially Recognised as Legal Currency in Japan
The value of the digital currency, Bitcoin, has sky rocketed in recent weeks. The reason for this upward swing is due to a certain Asian country giving the money recognition as a legal currency. Authorities in Japan have announced that Bitcoin will be accepted for transactions by businesses in the area. The change is monumental as Bitcoins were considered as somewhat of a grey area for the users up until now.
As of Monday the 3rd of April 2017, 12:01 local time, the currency was given full recognition for being legal. The Financial Services Agency (FSA) announced that the decentralised virtual money would be recognised as legal tender from the date onwards. This will finally bring an end to the debate regarding whether or not Bitcoins are accepted in the Pacific Ocean Island. For months a debate was being waged on the issue in the National Diet, which is the country’s government’s legislative branch. Many were keen to know whether Bitcoin should be regulated and accepted in the country. It is safe to say that those arguments have now been put to rest.
While many businesses have celebrated the move by the FSA, critics have been equally vocal about this change. They are concerned with the currency’s widespread use by criminal organisations and money launders. Their concerns are valid due to the anonymous nature of Bitcoin. It is virtually impossible to track and keep tabs on the digital currency and its transactions.
It is therefore very important that strict measures are taken to regulate the use of the currency. It has been suggested that cryptocurrency training be provided as a must for financial employees dealing with Bitcoins on a daily basis in Japan. This will also involve forcing banking institutions that are engaging in bitcoin exchanges to adhere to operational regulations. The government will have to play a pivotal role in order to establish the required regulations. While there is much speculation surrounding the type of measures that are needed to make Bitcoin safe for businesses in Japan, the specifics of what the regulations will actually look like have yet to be drawn out.
It also comes as no surprise that Bitcoin has been used by gambling networks around the world right from the start. These networks use the currency to operate in countries where online casinos are not legal.
As far as the gamblers are concerned, the currency is a sure fire hit. It has been the preferred method for both deposits and withdrawals for numerous online operators for a long time and the use of Bitcoins remains popular in the sector till this day. It is in the interest of the operators to provide numerous payment methods including Bitcoin transfer to their customers. Sites such as Slots.LV, Ignition Casino and Bovada all accept Bitcoin. Apart from the anonymous nature of the currency, it also offers some of the lowest transaction fees, making them ideal for businesses.
Given the rather desirable features of the currency, Japan will need to figure out a way to track Bitcoins throughout their financial channels once transactions become more common. At the very least, they need to make sure that it is not being used in any illegal ways. If it is not monitored effectively, the virtual currency has the potential to wreak havoc on accounting departments across the country.
Those creating Bitcoins, who are also known as Bitcoin miners, have released a fair amount of the virtual currency into circulation already. The currency is unlocked by solving complex mathematical problems. Today USD 17 billion worth of Bitcoins can be found in circulation around the world.
While this may seem like a big number, it is merely a drop in the ocean in terms of total worldwide money. There is about USD 1.2 quadrillion (UDS 1,200,000,000,000,000) invested in derivatives alone.
The stock market may have been hot since Donald Trump became the 45th president, but that is nothing in comparison to the trajectory of the virtual currency in question. To say that the Bitcoin has had tremendous growth in the last two years would be an understatement.
Nearly two years ago, in April 2015, the Bitcoin was trading at about USD 240. It has been reported that this week the currency was trading at a little over USD 1,100. This equates to a gain of nearly 360 per cent in the space of 24 months. The value is set to become even higher now that Japan has legalised the virtual money.
Across the pond, the US Securities and Commission (SEC) is less enthusiastic about the currency. They have ruled against legalisation of Bitcoins. The SEC claimed that the decision to not legalise the currency was largely due to its anonymous nature. The government regulatory agency is of the opinion that currencies must be designed to prevent fraudulent and manipulative acts. They further go on to argue that investors and public interest need to be safeguarded against such practices. In their opinion, Bitcoin fails to provide the parties concerned with a peace of mind, therefore, is a no go.
In a 2014 Investor Alert, the Securities and Commission stated, “Potential investors can be easily enticed with the promise of high returns in a new investment space and also may be less skeptical when assessing something novel, new and cutting- edge. Unlike traditional currencies, Bitcoin operates without central authority or banks and is not backed by any government.”