Japanese Legislators React To Mt. Gox Fiasco With Proposed Regulation Of Bitcoin
The recent fiasco the Tokyo-based Bitcoin exchange Mt.Gox has got the Japanese Government working on redefining the virtual currency in same category as other commodities like gold. According to the proposals all gains from trading Bitcoins will be subject to Japanese Tax. The new regulations would also forbid Japanese banks from handling Bitcoin and forbid security firms from conducting trades in Bitcoin.
One of the main attractions of Bitcoin is its anonymity and lack of government intervention. This has led to many claiming that virtual currencies are untraceable and make for the ideal vehicle for money laundering and just about anything else associated with the underworld.
This radical change of approach by the Japanese government could well impact other countries to follow suite. Until now the volatility of Bitcoin has been too much for most governments to get their heads around. The fluctuations are so wild that in a single day the currency can drop by 50%. As it stands China has banned financial institutions from processing Bitcoin payments and Russia forbids the use of Bitcoins.
There are those who believe the recent turmoil in the Bitcoin market could be beneficial in the long run for virtual currencies as it will force the industry to impose tighter controls on themselves in order to sustain and grow their businesses. As we have pointed out any commodity that fluctuates form a low of $13 to $1200 at its peak in a single year certainly warrants attention.