Japan are known for always being at the forefront of new technology and are never afraid to try new things, so it is really no surprise that they have recently passed a law which will make Bitcoins a legal tender in Japan.
Of course, Japan is as intelligent as they are open to technology and so this new law comes with regulations for those companies who are hoping to use the new cryptocurrency to ensure that everything is above board and not being used for criminal activity. An example of these laws includes having a minimum of $100,000 in reserve, be regularly audited by the Japanese National Tax Agency and keep the government informed of their activity.
It is important that consumers are protected, as this is something new that has not yet been tested widely and there are still risks that could come up, especially due to past scams that have taken place in the past online. It is understandable that the government would want to regulate this activity.
To get the license to be able to use Bitcoin as a currency will cost around $300,000 although there is no promise that this fee will get them the license. With such a hefty upfront cost, it is unlikely that smaller, independent companies will be able to adopt Bitcoin which may stop it from becoming entirely widespread in the country.
Unfortunately, some of these smaller businesses may already be using Bitcoin but will have to stop when the license fee comes in as they may not have the cash flow to pay the fee. This has led to a lot of negative comments from small business owners who feel as though this is pushing them out of the market.
In 2015, New York State had a BitLicense law which tracked the use of Bitcoin and required a license to buy and sell them; however, the restrictiveness of the law meant that a whole load of Bitcoin startups refused to carry on working in the state.
Japan’s new laws around Bitcoin are set to come into play in April 2017 and will recognize Bitcoin as a form of “payment” but not necessarily “currency,” which is slightly different. Either way, this should raise the profile of Bitcoin as a cryptocurrency and encourage people who may have previously been nervous and apprehensive about using Bitcoin that it is legitimate.
This is a big step for Japan which could, in the next few years, become more widespread. Watch this space!