The Japanese Diet—or legislature—has passed a law that allows digital currencies such as Bitcoin to be used as methods of payment.
The bill went into effect April 1. It does not recognize Bitcoin as currency, but accepts that virtual currencies have “asset-like values” that can be used “as payment to indefinite parties for the cost of purchase or rent of items or receipt of services and which can be transferred by means of electronic data processing systems,” according to Bitflyer exchange.
“Bitcoin will continue to be treated as an asset unless there are future revisions or directives to Japanese tax law,” the exchange noted.
The bill also outlines regulations for bitcoin exchanges in Japan. The government’s Financial Services Agency has already started regulating virtual currency exchanges and their operators, but the new law requires them to register with the Prime Minister, according to a report from CalyvinAyre.com.
The bill, however, does not spell out accounting standards for virtual currencies for tax purposes, leaving many businesses and exchanges unsure how to proceed with using virtual currencies for payment, reports said. The Accounting Standards Board of Japan reportedly will begin formulating a framework for treatment of virtual currency,” according to Japanese media.
