TOKYO (3/10/14)--The Japanese government Friday declared that Bitcoin was not legal tender, but that the digital peer-to-peer payments system could be subject to taxes.
"Bitcoin are neither Japanese nor foreign currencies and its trading is different from deals stated by Japan's bank act as well as financial instruments and exchange act," according to a document from Prime Minister Shinzo Abe's cabinet (The Wall Street Journal March 7).
Japan did say that the bitcoin sales, related transactions and gains on exchange rates would be subject to income, corporate and consumption taxes.
The country is trying to define Bitcoin and the government's role in regulating it in light of the bankruptcy of Mt. Gox, a Tokyo-based Bitcoin exchange. The Feb. 28 bankruptcy filing cited a loss of 850,000 bitcoins, worth about $450 million at the time (News Now March 3).
In other Bitcoin news, the Canadian-based Flexcoin exchange also closed down last week after hackers made off with about 440,000 euros ($610,000). It said owners could receive some bitcoins back from computers that weren't connected to the Internet and couldn't be raided (Euronews.com March 5).