Japan played a key role in the excellence of Bitcoin last year despite the setback the cryptocurrency suffered including hard forks, hacks & scams.
Japan’s Financial Services Agency (FSA) also did not disappoint unlike regulators in most other countries. It analyzed the cryptocurrency issues and came up with fair rules. These rules to regulate virtual currency exchanges instead of weird crack downs as happened in China and India for instance.
Although is not clear yet if Satoshi Nakamoto hailed from Japan or not, the country has good and deep history of Bitcoin & cryptocurrencies. Indeed, Japan’s Bitcoin’s home. Satoshi Nakamoto is a Japanese name and the cryptocurrency website was first registered in the country.
However, Japan has also registered some of the worst controversies related to Bitcoin: for instance, Mt. Gox’s implosion was the worst dark clouds Bitcoin’s ever experienced according to some people.
The saga ended with closure of the exchange and users (127,000 customers around the world) lost a staggering 650,000 bitcoins, worth around $437 million at the time. The amount of Bitcoins lost could be worth nearly $9 billion today.
Japan responded by stepping in to protect customers. Now it is one of the most forward thinking jurisdictions for Bitcoin and virtual currencies. FSA laid good foundation at a time when the community was crowded with inexperienced actors. Later on, the rest of the world can now understand & accept Bitcoin and other cryptocurrencies more that they would have in the earlier years.
But Bitcoin has shown good resilience not to Mt. Gox’s alone but also to last year’s scam related to Bitcoin Gold.
The country enacted amendments to the Payment Services Act assisted by BitFlyer. It is one of the largest crypto exchanges in the country. Referred to as the Virtual Currency Act, it provided three main pieces of regulations together with other tax reforms in 2017.
Japan expanding Bitcoin usage
According to these regulations, Bitcoin can be classified as an asset and used as a payment method yet not a legal currency. The FSA has authority to issue Bitcoin licenses to cryptocurrency exchanges. This served as a good thing to establish and stabilize the markets.
Japan also reviewed the tax act on July 1 and removed a consumption tax that dissuaded foreign investors
from purchasing bitcoins on Japan’s market. International investors can therefore invest in Bitcoin in the country. This has expanded Bitcoin usage.
It is unusual for governments elsewhere to involve exchanges in developing regulation. Japan involved BitFlyer, which has been in the forefront of Bitcoin research. For instance, the company has a world-class enterprise blockchain called “miyabi” Which delivers 4,000 transactions per second.
Indeed, Japan is a good example to many countries still figuring out if and how to regulate cryptocurrencies or ban them altogether.
Many countries mix up all issues relating to Bitcoin including legality or illegality uses of Bitcoin and other stuffs. These all things end up with a big mess when drafting regulations. Some counties make irrational choices under external pressure while many others are unable to move beyond point zero in drafting regulations, sometimes for lack of clarity on the involved issues.
Forward thinking into 2018, Bitcoin now has Bitcoin futures working in U.S.A. However, regulators will still play a role in ensuring more institutional investors gain more access to markets and in stabilizing cryptocurrencies.