Japan considers regulating, taxing Bitcoin

In the wake of the MtGox collapse, Japan is looking into regulating Bitcoin — including a possible tax on the cryptocurrency, according to a report Tuesday.

The Yomiuri Shimbun newspaper said that the finance ministry and national tax agency are looking into ways to govern Bitcoin transactions. Officials think that purchases made with the digital currency should be taxed according to existing consumption and corporate tax laws, said the Yomiuri Shimbun, although the report did not cite any sources.

The move would mean Bitcoin would be treated not as a currency, but as a commodity, like gold. Money made from trading the currency online could be taxed, according to the Nikkei Asian Review.

The U.S. is taking the opposite approach — for now. Yesterday, Federal Reserve Chair Janet Yellen said that the U.S. federal reserve can’t regulate Bitcoin because it operates outside of the banking system. She did say, however, that Congress could institute some sort of an overseeing committee.

The collapse of the MtGox exchange has put some pressure on international governments to look into regulating the currency. The Tokyo-based exchange filed for bankruptcy last week and reported that 750,000 customer-owned bitcoins had gone missing. Since then, the exchange has been hacked and the source code posted online.

The MtGox problems briefly depressed the Bitcoin market as it dropped as low as $430 last week. The market has since bounced back and was trading at around $668 at 11:30am PT Tuesday, according to the Coindesk BPI.

Feature image courtesy of Thinkstock/Nevarpp.