At least two members of parliament from Japan’s governing party have shown a keen interest in bitcoin, holding discussions with local advocates and even attending gatherings of Tokyo’s regular Meetup group.
One is Mineyuki Fukuda, who became interested in bitcoin after reading news stories. In an effort to learn more, he has gone directly to sources and arranged meetings at his parliamentary office with locally-based bitcoiners (including CoinDesk) to gauge opinions and hear recommendations on bitcoin policy.
He also met a team from California-based digital currency exchange Kraken, including CEO Jesse Powell and Japanese-born Ayako Miyaguchi, to hear an industry perspective.
“Which country do you think has the best policy towards bitcoin at the moment?” asked Fukuda-san. “And what approach would you like to see Japan take?”
Continued participation by Mr. Fukuda and at least one other representative are thanks in part to Keiichi Hida, who organizes the local group ‘Rising Bitcoin Japan‘ and has campaigned for months to bring bitcoin out of the shadows and into mainstream attention.
Hida realizes the importance of gaining political support for bitcoin’s cause, given the often-negative coverage it received in the past from the Japanese media following various scandals. Politicians’ interest is also genuine, he added.
“I think that he trusts and feels the strong economy of digital currency,” Hida said of Fukuda’s efforts.
Attendance at bitcoin meetup groups by sitting members of parliament or Congress is almost unheard-of in other large countries, yet that is exactly what has happened in Japan this year.
The two members have both come along to the group’s Thursday night meetings to talk to both Japanese and expat bitcoin businesspeople and learn more about the ecosystem first-hand.
Not official policy
Interest from individual members, of course, does not constitute official government support for digital currencies.
Despite a lack of official endorsement, Japanese authorities have taken a hands-off approach to bitcoin-related activity so far. As the world’s third-largest economy and one of its major financial centers, it makes Japan one of the world’s most significant jurisdictions to take such a stance.
Minister of State for Financial Services (and former Prime Minister) Taro Aso said recently in a TV interview about bitcoin:
“We’re in charge of money. If it’s not money, it’s not the Ministry of Finance/Financial Services Authority’s jurisdiction.”
No capital gains?
Recent coverage in local news agencies suggested that while the government wanted to crack down on bitcoin-related crime, applying capital gains tax would be difficult for digital currency investments and there was no intention to impose one “at this point”.
As some have pointed out, though, having no official policy is not always the most secure option.
Uncertainty leaves the government’s options open to change its mind and introduce regulation at some future point. One local bitcoin entrepreneur said:
“A continued hands-off approach probably makes sense, but the lack of clarity about what will happen in the future – for example, the uncertainty over whether you need to pay consumption tax on selling bitcoins – makes it harder for responsible people to enter the market, and risks leaving it to people who either don’t understand the law or aren’t interested in following it.”
Existing tax laws, even those pertaining to capital gains tax, could be interpreted to already apply to bitcoin as it applies to gains on any investment, said Dr. Karl-Friedrich Lenz, a law professor at Aoyama Gakuin University.
Applying consumption tax would require a more precise definition of bitcoin’s status as a means of payment or otherwise.
The Japan scene expands
Mention to anyone overseas that you’re a bitcoiner from Tokyo and the conversation switches instantly to Mt. Gox. “Were you there?” they want to know.
Indeed, Mt. Gox was the easiest exchange to use for Japan residents thanks to local bank access and its ability to verify Japanese ID documents without the need for official translations.
News of fund recovery notwithstanding, though, most bitcoin enthusiasts in Japan would rather put the whole sordid affair behind them and move on. As well as Rising Bitcoin Japan there is another advocacy group called the Japan Digital Money Association, representing Japanese-speaking startups and mining operations.
At the peak of Mt. Gox’s problems the Tokyo Bitcoin Meetup Group attracted more than 50 participants to its regular meeting, and was nearly expelled from its meeting place due to the presence of at least three TV news crews and local newspaper journalists.
Bitcoin coverage in the local mainstream media tended to be curious but overly-focused on Silk Road and drug sales, though it has attracted more serious attention from the local business press.
The respected financial-business print magazine Nikkei Weekly gave bitcoin a cover and nearly one-third of that week’s edition, generally positive.
Local Wall Street Journal reporters Takashi Mochizuki and Eleanor Warnock have provided plenty of explanatory coverage, and the WSJ is hosting a ‘Tech Cafe‘ event in Tokyo about bitcoin with expert panels on 22nd May.
Images via Rising Bitcoin Japan