Japan’s Financial Services Agency (FSA) considers enhancing currency legislation on bitcoin and other crypto coins. As a result, financial entities would have to undergo registration with the regulator.

FSA is exploring the possibility to recognise digital currencies as “methods of payment equivalent to conventional currencies,” according to a report by Nikkei. The FSA suggests to make legislation revisions during the next ordinary meeting, defining virtual currencies as a medium of exchange.

According to the comments on Reddit, users believe that the reason to strengthen control over the cryptocurrency ultimately lies in the Mt. Gox collapse in 2014, which left many customers empty handed.

“This isn’t Japan accepting Bitcoin as the future of money, this is Japan saying regulatory framework will act to prevent another Mt. Gox,” a Reddit user Evebitda commented on the topic.

These legislative amendments aim to make digital currency tenders more legal and to develop the financial technology sector. If adopted, exchanges and other financial entities dealing with digital currencies will have to register with the FSA, which means tighter and more scrupulous control and no anonymity.

Monetary authorities around the globe seek to implement virtual currencies in existing financial legislative framework. Last October, the European Court of Justice ruled that bitcoin exchange transactions should be exempt from VAT, equating digital currencies to fiat. Last September, the US Commodity Futures Trading Commission ruled that bitcoin is a commodity. The decision was supported last week by a US district judge, who reaffirmed that as regards to bankruptcy procedures bitcoin must be treated not as a currency, but as a commodity. The status of the digital currency is still undetermined in Russia where issuance of any currency other than the national one is prohibited by the Constitution. 

Elena Platonova