March 4 The Japanese government will set rules
for trading bitcoin, including imposing taxes on transactions
with the virtual currency, that will become the basis for
guidelines applicable to similar currencies in future, the
Japan's government is still trying to explain the collapse
of Mt. Gox - once the world's once largest bitcoin exchange -
and figure out how the Tokyo-based company could lose nearly
half a billion dollars in bitcoins, Finance Minister Taro Aso
said on Tuesday.
Mt. Gox filed for bankruptcy protection in Japan on Friday,
saying it may have lost some 850,000 bitcoins due to hacking
into its faulty computer system.
The guidelines proposed by the Japanese cabinet will call
for taxing bitcoin transactions, defining the virtual currency
as a commodity rather than a currency, the Nikkei said.
Gains from trading bitcoins on online exchanges, purchases
made with bitcoins, and companies earning revenue from bitcoin
transactions will be subject to Japanese tax, the financial
Banks will be also be prohibited from handling bitcoins
while securities firms will be barred from brokering bitcoin
trades, the Nikkei reported.
Bitcoin is a digital currency that, unlike conventional
money, is bought and sold on a peer-to-peer network independent
of central control. Its value has soared in the last year, and
the total worth of bitcoins minted is now about $7 billion.
The virtual currency has engendered a new wave of creative
criminality from hacking online platforms to steal bitcoins to
their potential for use in money laundering, bribery and
purchases of illicit products.
Last week, U.S. Federal Reserve Chair Janet Yellen said the
U.S. Congress should look into legal options for regulating
virtual currencies such as bitcoin.
Shanghai-based BTC China, the world's largest bitcoin
exchange by volume, has imposed new regulations to curb bitcoin
trade weeks after Beijing banned financial institutions from
trading in bitcoin due to the risks involved.
Russian authorities have issued warnings against using
bitcoin, saying treating it as a parallel currency is illegal.
Britain, however, has supported bitcoin and is preparing to
abort its plans to tax bitcoin trading, according to a Financial