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Japan to tax bitcoin trade?

March 7, 2014

The Japanese government has said it's in favor of levying a tax on all bitcoin transactions. The tax could initiate formal regulation of the troubled virtual unit, which is also suspected of aiding money laundering.

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Bitcoin Flexcoin Bank Krise
Image: Reuters

The government of Japan said Friday it did not recognize bitcoin as a currency, but insisted transactions involving it should in the future be subject to taxation.

"As a matter of common sense, if there are transactions and subsequent gains, it is natural for the Finance Ministry to consider how it can impose taxes," Chief Cabinet Secretary Yoshihide Suga told reporters in Tokyo.

Suga added the government was currently sorting out exactly in what way the nation could become a global leader in regulating bitcoins and similar virtual units generated by complex chains of interactions among a worldwide computer network.

No timetable yet

The resulting anonymity of bitcoins and lack of supervisory instruments has been attacked by critics who fear the units could also be used to finance organized crime and terrorism. Some countries such as Russia and China have already cracked down on bitcoins by severely restricting their use.

Virtual Currency for Smartphones

Recent security issues have not added to bitcoin's financial clout either. The bankruptcy of the Mt. Gox Exchange, which once accounted for some 80 percent of all bitcoin transactions globally, only seemed to have been the start of a longer series of failures caused by hackers. A Canadian-based exchange was also closed earlier this week.

Japan indicated it didn't necessarily want to go it alone in trying to get a grip on bitcoin, suggesting that any regulation should involve international cooperation right from the start to avoid loopholes.

hg/dr (AFP, Reuters)