Japan’s legislature The National Diet passed a bill today to regulate operators of Bitcoin and virtual currency exchanges. The Japan Times reported that under the revised law, virtual currency exchange operators are required to register with the Financial Services Agency (FSA) of Japan. The agency will be authorized to conduct on-site inspections and issue administrative orders as needed.
The bill comes more than two years after Mt. Gox, a Tokyo based Bitcoin exchange, went bust in February 2014. Before the firm’s bankruptcy, the exchange was the largest in the world for Bitcoin and other digital currencies.
Operators have welcomed the new regulations, as the aim is to improve trust between the public and the industry when dealing in virtual currencies, so another Mt. Gox fiasco doesn’t happen again.
Operators also cheered knowing that when the legal status of virtual currencies such as Bitcoin is established, more firms, including perhaps big banks, will enter the market to further develop the industry and facilitate the use of cryptocurrencies. However, the question of widespread mainstream adoption with Bitcoin is still a point of debate, and for the foreseeable future is likely to remain so, as Apple and Android Pay facilitate mobile payment technologies for the masses.
The revised bill passed today in Japan defines virtual currencies as “assets” that can be used in making payments and can be transferred digitally.
The revised law is noted to go into effect within a year.