Japan Proposes Definition for Bitcoin in Bid to Regulate Exchanges
With Mt. Gox no doubt still fresh in their minds, is the recent move by Japan to regulated bitcoin exchanges an unnecessary overreaction or simply a natural evolution? Indeed, what benefits will it bring to the average consumer who buys a few BTC like the majority of CoinCorner’s clients?
How does it affect CoinCorner?
Well, first off, CoinCorner isn’t based in the land of sushi and samurais, so Japanese regulation won’t affect us directly. However, we are based in the Isle of Man; a jurisdiction that has taken a proactive approach to legislation in the area of cryptocurrency. So, while we aren’t not fully regulated by the island’s financial services authority, we are legally obliged to follow anti-money laundering and terrorist financing legislation.
As things stand, it appears that the majority of what the Japanese regulator is proposing, would simply put them on a level playing field with the Isle of Man and further protect the consumer.
How does it affect the (bitcoin) industry?
If things were to progress further and counties began to implement full prudential regulation specifically aimed at bitcoin exchanges, what would this mean at a practical level? Well, it may finally mean access to mainstream banking which would, in turn, mean that acquiring bitcoin became easier and cheaper. This could be the catalyst that finally leads to the mass adoption of Bitcoin as a currency.
One of the main issues that regulators and banks have had with Bitcoin to date is how to regulate it. However, I would argue that regulating Bitcoin itself is difficult and unnecessary. If you regulate the venues, such as exchanges, that allow people to acquire and dispose of Bitcoin, this is a huge step towards solving many of the issues that certain sector have with.
Sure, regulation come at a cost, but perhaps the benefits outweigh those cost. One thing is for sure, Bitcoin exchanges will increasingly become regulated in the future. To what extent will be dependent on their domicile.
At CoinCorner we are engaged in high level, proactive, conversation with our local regulator to ensure that any regulation is intelligent and appropriate. To date, we believe we have succeeded with this aim.
Disclaimer: The views and opinions expressed here represent those of the contributor, not necessarily those of CoinCorner.
What do you think about the introduction of regulation for digital currency businesses? Let us know your thoughts in the comments below…