Japan has approved a law, which went into effect at the beginning of this month, that recognizes Bitcoin as a payment method. News reports state that the approval came after many months of debate and serves to improve the standing of the cryptocurrency in the country. The 2014 collapse of the Mt. Gox Bitcoin exchange caused the currency to crash, with repercussions felt all around the world.
This new legislation follows a steady stream of legal firsts when it comes to Bitcoin. Last year, Bitcoin exchanges were required to register with the country’s Financial Services Agency and were obligated to ensure that they comply with anti-money laundering and Know Your Customer provisions.
The 2017 law recognizes the cryptocurrency as a form of asset-like payment system, used to effect payment for goods and services electronically. It also sets up some rules for Bitcoin exchange businesses. The first is that they now have to register with the office of the prime minister, as well as secure a minimum JPY 10 million in capital, or about $90,000.
From a technical aspect, exchanges are obligated to implement cybersecurity systems to combat loss and theft. Regular conduct training programs must be offered to all employees and internal governance systems must be in place.
A work in progress
Japanese companies working with Bitcoin will probably have mixed feelings about this new law. Although it does liberate the use of Bitcoins as a payment method, it also raises a number of legal questions and financial questions.
Reports in 2016 suggested that further legal frameworks might need to be changed in order to accommodate the use of Bitcoin. One such important framework is the Banking Act. The Accounting Standards Board of Japan does not currently cover virtual currencies, which presents something of an accounting problem for Bitcoin-based operations. This latter issue is, at least, being given its due attention – the ASBJ announced that it would aim to restructure the framework to include Bitcoin within the next six months.
For casino players, this new legislation is good news. As Bitcoin continues to grow as a respected payment method, there will be fewer barriers to using it for all kinds of transactions, including casino play. A few casinos have already embraced the cryptocurrency but we can only surmise that more will follow suit as BTC becomes more popular.