The Japanese government has come down hard on the digital currency bitcoin.
The government today ruled that bitcoin does not fall under the category of currency as defined by the country’s law and that the transactions involving it should be made ‘taxable’.
Further it warned Japanese banks from opening accounts holding the virtual currency. Tokyo also clarified that banks are not allowed to broker bitcoin transactions.
According to the government, if bitcoins are used for money laundering, it would be classified under crime. The government is in an attempt to bring bitcoin transactions under the tax radar. The crypto currency is subject to taxation if it satisfies any clauses of income tax law, sales tax laws or any other prevailing laws in the country.
The government also warned users against owning and trading bitcoins. Citing the recent collapse of MtGox bitcoin exchange, the government also alerted users on chances of losing bitcoins through abuse of bitcoin system. The misunderstanding of how it works and the lack of regulations make it risky. Japan has now joined other countries in the world to caution the users about the potential financial and security related risks that they may be exposed to. It also warned that bitcoins could also be used for illegal activities, money laundering and for various unintentional violation of laws.
However, the Chief Cabinet Secretary Yoshihide Suga declined to comment on the time frame for implementation of the proposed regulations.