The government on March 7 issued a written statement announcing that bitcoins are not a currency and that transactions using them should be taxed based on the income, corporate and consumption tax laws. It also said that under the Bank Law, banks in Japan cannot open bitcoin deposit accounts, broker the buying and selling of bitcoins or exchange them for traditional currencies.
The statement came a week after Mt. Gox, the world's largest bitcoin exchange based in Tokyo, filed for bankruptcy in a major international scandal that took a financial toll on customers both in Japan and abroad. Mt. Gox claimed that its system was hacked and that it had lost its deposits of 750,000 bitcoins (valued at around ¥50 billion), ¥2.8 billion in cash from customer accounts and 100,000 bitcoins of its own.
Finance Minister Taro Aso said government ministries are collecting information on bitcoin. Both ruling and opposition parties are calling for some form of regulation. The government should work out effective measures as soon as possible to protect bitcoin users and to prevent the use of bitcoin for illegal purposes.