An innovative approach has come from the Land of the Rising Sun. Japanese regulators have made a proposal to include digital currencies into the category of standard currencies due to its use as a method of payment. In this way the digital currencies could be treated legally in the same way as a all the basic currencies
The Financial Services Agency (FSA) of Japan is weighing this possibility to amend the actual legislation and push the class of digital currencies among the standard ones, as they “fulfil the functions of currency”, according to Nikkei, stating “they are now recognized as objects but are not treated on a par with their more established counterparts.”
“Under the FSA’s proposed definition, virtual currencies must serve as a medium of exchange, meaning that they can be used to purchase goods and services. They must also be exchangeable for legal tender through purchases or trades with an unspecified partner.”
And what is the consequence of such a step? It would result in an obligation of all the financial institutions to register with the FSA. This could be a promise of avoiding previous mistakes with large impact as the the collapse of Japanese digital currencies exchange Mt Gox, which deprived large number of people of their funds through its insolvency in 2014.
This comes amid a wide debate, held in Japan, discussing all the possibilities of over how digital currencies’ exchanges regulation under know-your-customer (KYC) and anti-money laundering (AML) statutes.
Moreover, Nikkei informed that such drafts could be seed during the current legislative session of the Diet (Japan’s parliament), running from January 4 to June 1, with any changes being approved before the session concludes.
We have no report yet, if supporters or those against prevail.
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