Japan OKs recognizing virtual currencies as similar to real money


The Cabinet on Friday approved a set of bills to help banking groups expand their information technology businesses and to recognize virtual currencies as having a function similar to real money.

Under the revised banking bills, bank-holding companies will be able to acquire IT-related ventures. The move is aimed at promoting innovative financial services called “Fintech” and allowing banks to embark on new settlement systems and other businesses.

The bills also include measures for helping regional banking groups consolidate their fund and system management more easily after realignment, as well as improve their business efficiency.

The latest bills on virtual currencies recognize them as asset-like values that can be used in making payments and be transferred digitally.

By requiring registration of exchanges that handle them and designating the Financial Services Agency as their regulator, the government hopes to prevent money laundering and enhance protection of the virtual currency users.

Regulations on the virtual currencies were prompted by the Financial Action Task Force, who called for them in a report last year. The task force is an international body on countering money laundering and terrorist financing.

The FSA began pondering the introduction of new rules after major bitcoin exchange Mt. Gox Co. abruptly shut down in 2014 after its former CEO admitted it had lost around ¥48 billion in assets.