Japan Plans To Recognize Bitcoin As Method Of Payment On 1 April

Japan’s Financial Services Agency (FSA) last week, following the passage bills that recognise virtual currencies of having asset-like-values, confirmed that the country will recognise Bitcoin as a method of payment on 1 April.

Since then, people have been wondering as to how the country will control and monitor the usage of this crypto-currency. Here’s how it plans to do so:

Companies interested in adopting the bitcoin method of payment will have to seek permission from the government and will be required to have at least $100,000 in reserve currency. The users will have to report their activities to the government regularly and undergo routine audits by the Japanese National Tax Agency.

Apart from this, companies and individuals interested in using bitcoin will have to to pay the equivalent of some $300,000 to adopt it. The high price-tag, experts suggest, is to prevent smaller players in the market, largely untraceable, from using crypto-currency.

According to a report by Nikkei, the Accounting Standards Board of Japan has decided to develop an accounting framework for bitcoin management. The report says that the body will need at least six months to come up with a viable accounting method. Due to the lack of a viable accounting framework, the adoption is expected to be slow.

As per existing guidelines in Japan, currency holders can table bitcoin as inventory while issuers can deem it a liability.

The fact that Japan was the epicenter of the first mass bitcoin casualty that wiped out hundreds of millions is likely to play a role in deterring people from adopting it in the initial phase. But despite the odds, the value of bitcoins has risen 8.9 per cent in Japan and over 5,000 merchants and websites now accept it for payments. The number is expected to rise to 20,000 by the end of 2017.