What's Happening with Bitcoin In Japan?

Japan's approach to bitcoin is one that other countries can learn from.

Satoshi Yakamoto is (supposedly) Japanese.

Mt. Gox was a Japanese company.

In 2014, it was declared that Japan is officially a bitcoin friendly country.

As we explore throughout the world and understand how bitcoin is being treated in the different countries, many people may believe that Japan is not only "friendly" to bitcoin, but may even be the “Eden” of bitcoin.  But how true would that belief be?

Let’s start with Satoshi.  Although he’s clearly seen as the creator of bitcoin, the reality is that he’s never been seen (or at least acknowledged in public). The only real connection that exists (at this point) between Satoshi and Japan is his name. However, the actual identity of Satoshi has been such a mystery that just a few weeks ago, an Australian man was suggested to be the “actual” Satoshi.

Moving onto Mt. Gox, it is true that the company was a Tokyo-based company and that Japanese officials did ultimately arrest the CEO of that failed bitcoin exchange.  However, that CEO was a French citizen. 

The fall of Mt. Gox did have an impact on how Japan viewed bitcoin and ultimately has positioned the country into a leadership position in terms of addressing the legal and regulatory issues surrounding the digital currency.

As part of the bankruptcy proceedings around the Mt. Gox collapse, the Tokyo District Court handed down a judgment that bitcoins are “not subject to ownership.” Although this sounds like a negative rulling for owners of bitcoin, some legal scholars including Akhiro Shiba, an attorney-at-law in Japan, feels that “Actually, under Japanese law, the lack of “ownability” might be a positive feature of bitcoins as a medium of exchange.”

The Mt. Gox case made a significant impact on a country that for most of the population, had not heard about bitcoin until the company’s collapse.  According to Bitcoin Magazine, the event moved the Japanese government to make a cabinet decision on the treatment of bitcoin. 

Kevin Cruz writes that, “The decision did not rule bitcoin as currency nor as a bond; this prohibited banks and securities companies from dealing with bitcoins.” Cruz goes on to further report that the “Japanese Government ultimately ruled that it is not necessary to regulate sales, purchases, and/or exchanges of bitcoins.”

Japan’s recognition of the potential of bitcoin has led to a nuanced approach to the digital currency that led to the formation of a self-regulatory authority called the Japan Authority of Digital Assets (JADA).  As reported by Cruz, the legal council to JADA, So Saito voiced his opinion that the Liberal Democratic Part of Japan (which supports JADA) “would like to make Japan the most Bitcoin friendly country.”

To accomplish this, JADA seeks to implement guidelines, research and events that will lead to an expansion of more bitcoin companies and activity in the country. It takes a measured approach that balances the need for standards and guidelines along with an appreciation of the “huge potential” that exists around the digital currency and its ability to create new businesses and potentially, modify (and improve) the current monetary systems.

It’s an interesting approach coming from the country that saw the debacle of Mt. Gox occur in its own backyard. It also shows the forward thinking approach of a government that understands that too much regulation will send businesses away, while too little will impact the credibility and trust of bitcoin.  It’s an example that many other countries, including the US, can learn from.

Maybe, Satoshi is real and maybe, he’s actual from Japan, after all.