Here’s a headline that could stop everyone in the payments ecosystem in their tracks: “Japan considers making bitcoin a legal currency.”
And then, there are the countries that have outlawed, or want to outlaw, bitcoin.
And so, the big global debate about bitcoin continues on.
The latest conversation going on in Japan’s Liberal Democratic party is about plans to make bitcoin and other digital currencies be treated equal to any other currency. What that would do, of course, is put bitcoin in a regulatory framework that enables lawmakers to tax, regulate and monitor bitcoin transactions in a way that may give more legitimacy to the concept of the cryptocurrency.
Why Japan is such an interesting case, of course, has to do with the infamous Mt. Gox bitcoin exchange case that led to the loss of millions of bitcoins. As a result, its ex-CEO, Mark Karpeles, is in the custody of Japanese authorities after being formally charged with embezzlement.
Positioning a legal framework around bitcoin could also help establish an infrastructure to bring bitcoin into Japan’s mainstream financial ecosystem. For now, there are no specific laws around bitcoin. Which means bitcoin is already legal. But being legal without any government involvement has left bitcoin in limbo in many regions across the globe with governments not really sure what to do with it.
Which brings us back to why the conversations are gaining more traction in Japan. But it doesn’t appear, for now, that the concept of treating bitcoin as an actual regulated currency is imminent. The proposal was discussed this week, and there are plans to move the discussion to parliament next.
“There is a long way to go,” Tomonori Kanda, an official in the financial affairs section at the party’s headquarters, said, as quoted by The Guardian. “But we have discussed reform and believe it is the right way to go.”
At the moment, Japan treats bitcoin as a commodity. Last September, the U.S. Commodity Futures Trading Commission ruled that bitcoin would be treated as a commodity. This gives the agency the right to monitor and regulate business operations using virtual currencies for trading but doesn’t put it in the same box as currencies.
On the other side of the pond, a month later, the European Union Court ruled virtual currencies to be a currency and not a commodity. Where this matters, of course, is in how they’re taxed. Because of this ruling, bitcoin is considered tax-free. But, from Europe’s perspective, bitcoin and other virtual currencies now have a stamp of approval toward being considered an actual currency. That’s similar to the proposal being discussed in Japan.
But based on the reaction from a Financial Services Agency official in Tokyo, that may still be a long way off. That official denied to say how legislation was being changed — if at all.
“We have not decided anything yet,” the official said. “The way things work here is that any change would have to be approved by parliament first, and then we would work on writing the legislation.”
I guess we’ll have to wait and see.
As for what else happened in the world of bitcoin?
There’s Trump, And Then There’s Trumpchain
Who doesn’t love a good parody? Especially when it involves bitcoin. Last September, a Twitter account called @realBTCtrump graced us with its presence on the Internet. It even used the hashtag #MakeBitcoinGreatAgain. But it hasn’t been so active since last November.
Luckily for all of us, there’s another one out there that’s been getting a little more play: @trumpchain. And this time, a more evolved hashtag has come along: #MakeTheBlockchainGreatAgain.
Thank you, Internet.
Its latest pinned tweet?
It can happen. Our blockchain has tremendous potential. We have tremendous people. #MakeTheBlockchainGreatAgain
— Trumpchain (@trumpchain) January 24, 2016
But it gets better.
They’ve taken our jobs, they’ve taken our bitcoins, they’ve taken everything. We’re bringing our bitcoins back, folks.
— Trumpchain (@trumpchain) February 24, 2016
The list could go on. Either way, this account from New York City is gaining ground, promising to mix The Donald’s speeches with chatter from the bitcoin community.
But back on the serious side of things…
How Much Can Blockchain Save Banks?
That’s the question that Ripple attempted to answer this week.
While it’s no surprise that Ripple is promoting the use of blockchain and distributed ledger technology among financial institutions. The company, after all, specializes in the space and is partnering with other FinTech players to unleash its Interledger Protocol tool to ease cross-border payments.
Recently, however, Ripple pinpointed just how beneficial the blockchain could be for banks that adopt it for payments purposes. According to the company, banks can save up to 42 percent when they use the Ripple network for cross-border payments processes. The statistic emerged from a new report by the company aimed at identifying the cost savings potential of the blockchain for financial institutions.
The firm also calculated that respondent banks can save up to 33 percent on global payments, thanks to a reduction in liquidity cost, payment operations and compliance costs.
Bitcoin’s Existential Crisis Continues
What’s best for bitcoin? That’s at the center of the debate that’s been slowly tearing the community apart.
In a recent interview with the Let’s Talk Bitcoin podcast, Bitcoin Foundation Chief Scientist Gavin Andresen explained why he is siding with Bitcoin Classic over Bitcoin Core. Bitcoin Classic is what’s been creating all the buzz in the community as it would increase the block size limit from one megabyte to two megabytes.
What Andresen argues is that bitcoin developers are not listening to what miners and those in the bitcoin community really want. And for bitcoin to evolve, he said, it’s going to take working together a bit more to see what works best for the ecosystem.
“The market will decide. That’s kind of where the rubber meets the road with bitcoin is what software people decide to run,” Andresen said.
As to his opinion on Bitcoin Core?
“The root of my issue with [Bitcoin] Core is I just think that they’re not listening to their customers. I don’t think that they’ve been listening to the miners, and I don’t think that they’ve been listening to the people that do the bulk of the transactions on the network,” he said.
And back on the dark side…
Ex-Secret Service Agent From Silk Road In Hot Water — Again
Remember Shaun Bridges? To refresh your memory, he was the ex-secret service agent that helped take down the Silk Road online drug marketplace. Later, it was discovered that he had actually stolen $800,000 in bitcoin during his involvement in the case and was sentenced to nearly six years in prison.
Before heading to prison, he tried to flee but was caught attempting to leave the country. And guess what? He’s now in another legal mess. The government now claims that Bridges may be linked to another case related to the Silk Road.
“The U.S. had recently become aware of additional thefts of bitcoins from Secret Service accounts, the facts of which led the government to believe that Bridges, working with others, was also involved in these thefts,” a new filing from the U.S. District Court in Maryland reads.
Yikes. No wonder he was trying to flee.
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