Digital currency (most notable: Bitcoin) has always been a hot and delicate topic in the financial world. Since the inception of bitcoin in 2009, concerns about the unregulated p2p global economy being used for tax evasion and money laundering inevitably increase.
In 2014, the world’s largest bitcoin exchange, Mt. Gox, declared bankruptcy due to a $473 million (approx. 750,000 bitcoins) theft. Although the thereupon CEO, Mark Karpeles, was arrested for fraud and embezzlement, the charge was not related to the missing bitcoins, and the creditors were not able to receive compensation due to Tokyo local court’s ruling that bitcoin is not eligible under bankruptcy law.
In March 2017, Japan legalized Bitcoin as a payment method (legal tender) and later in September, Japan’s Financial Service Agency (FSA) officially recognised 11 companies as registered cryptocurrency exchange operators.
Japan’s legal support for digital currency shows that regulators around the world need to stop ignoring the fact that digital currency is an inevitable component in the development of finance and technology, or the two combined, fintech, and start thinking about the most suitable ways and methods to embrace and utilise it for its local economy.