Japan Looks At Regulating Bitcoin And Other Digital Currencies

Once the mainstream media picked up the news about the arrest of former Mt. Gox CEO Mark Karpeles, it was only a matter of time until the Japanese got involved with Bitcoin more strictly. If there is one thing Mt. Gox has taught us, it is that regulation up to a certain extent is needed, even though a lot of people perceive it as a “necessary evil”.

Mt. Gox Arrest Putting Things To Rest Once and For AllMt. Gox

The arrest of former Mt. Gox CEO Mark Karpeles is a godsend for the Bitcoin community and affected users of the Bitcoin exchange’s collapse. After more than a year of fleeing from the policy and impending justice, Mr. Karpeles has finally been arrested and is currently awaiting trial for his past transgressions.

Mt. Gox’s downfall brought a lot of negative opinions to Bitcoin because mainstream media considered it as the “Wild West” of finance. Truth be told, without proper regulation and legislation in place all around the world, Bitcoin, and other digital currencies will keep facing uphill battles on their way to gaining mainstream adoption.

With thousands of users affected by the Mt. Gox collapse, and over 300 million worth of Bitcoins still missing from the books, the arrest of Mark Karpeles will hopefully shed some light on the situation. Most Bitcoin community members, even now, still suspect the Frenchman of owning most of the missing funds.

While the trial against Mark Karpeles is being prepared, and the Tokyo police continue their investigation, Japanese government officials are preparing to take steps towards regulating Bitcoin in the country. Up until now, Japan has been quiet in terms of Bitcoin usage, and it looks like the government wants to take the necessary steps before things get out of hand for a second time.

Japan’s Financial Services Agency Looking Into Bitcoin RegulationJapan FSA

At the time of publication, it is not clear what type of action Japan’s Financial Services Agency wants to take in terms of Bitcoin and digital currencies. What we do know is that a legal and regulatory framework for Bitcoin will be established at some point, and these could be pre-emptive steps towards reaching that goal.

According to The Japan News, Bitcoin service operators may be forced to register their business in accordance with Japanese Financial law in the near future. Additionally, considering how most of these platforms facilitate the transfer of funds with a monetary aspect, a license will need to be obtained as well. This license would be Japan’s equivalent of the US Money Transfer License.

But that is not all, as Bitcoin operators may very well have to record all user data of the past, present and future. Last but not last, the internal managerial systems will need to be revamped in order to be compliant with the law. Plenty of changes are looming on the horizon for Japanese Bitcoin businesses, and it will be interesting to see how quickly a framework can be put together by government officials.

Source: The Japan News

Images courtesy of Mt. Gox, Shutterstock and Japan FSA.