Bitcoin is the first cryptocurrency created in 2009 which, like any other cryptocurrency, works in a similar way to the exchange or currency methods that we regularly know (dollar, euro, peso), which are used to exchange goods and services; however, different to other cryptocurrencies, Bitcoin is decentralized, no one controls it and does not have a central emitter. Bitcoin is an electronic currency that allows to make direct, instant and anonymous transferences between two users from anywhere in the world. The decentralized system behind Bitcoin is one of the visions of this digital transformation in which the society and economy move.
Cryptocurrencies, Bitcoin among them, despite of being safe, whole and truthful, they are not legal in every country. However, on April 1st, 2017, very important news for the digital economy were released. The Financial Services Agency of Japan, FSA, legalized Bitcoin in the country as a law in force in the Japanese economic market, allowing the expansion on a new market for this currency.
The legalization of Bitcoin in Japan is a great step for this cryptocurrency and Blockchain’s general ecosystem —Blockchain is a shared database that works as a book to register trading operations; the technological basis of Bitcoin’s operation.
Implementation of Bitcoin in the Japanese economy
The reason why Japan legalized Bitcoin is so it can be used as a payment method, along with other currency units and other virtual currencies that are not controlled by banks, becoming an answer for their increasing demand, ensuring the users’ protection and easing the technological sector development, especially the commercial and financial transactions via internet. To this end, the government proceeded to conduct a public consultation on the amendment, in which a total of 5,307 comments from 72 individuals and companies across the country expressed their opinions and made their recommendations on this issue.
In the new legal framework, entities that offer this type of services related to virtual currencies must be subject to the supervision by Japanese authorities, which will allow preventing scandals like the 2014 Mt.Gox scandal, Bitcoin’s biggest exchange bureau worldwide, Tokyo-based, which fell into bankruptcy after denouncing the disappearance of 850,000 units of the virtual currency, equivalent to 48,000 million yen (352 million euros, 387 million dollars), reason why Japan approved a regulation that classified this cryptocurrency, not as a currency, but as a commodity.
With this new regulatory law of April 1st, 2017, Japan would be placed again on the first place of digital currencies regulation. Currently, there are 600 virtual currencies in the world, Bitcoin occupying the first place, with a larger capitalization market estimated at 6.4 billion dollars (5.800 million euros), influencing the business world in a global scale.
Today in Japan, this cryptocurrency becomes the best known and worldwide used cryptocurrency as an officially recognized and enforceable legal method, legalizing the exchange with capital requirements, information security and better and safer operating procedures; this will lead to the creation of training programs for regulators, undergoing annual audits.
For the time being, government authorities, companies and consortiums want to have a national financial application, through the creation of a transparent and legal place for Blockchain’s technological platform, as it’s the case of the financial group Mizuho, which is undertaking the creation of projects in the company’s incubator to evaluate the application of cross-border payments, use of Bitcoin at a banking level and the implementation of the Hyperledger platform. Likewise, a wave giant financial investors has also been unleashed in conjunction with the positioning of Japan as Bitcoin’s biggest trading country, and influence in the world.
There are many reasons why this virtual currency is becoming more popular and the most widely used in the world. Sellers, business owners, private users and virtual marketing companies find important advantages in Bitcoin that have led them to adopt this system, which represents the economic evolution in this technological spiral in which the world is immersed.