Japan's response to Mt. Gox Bitcoin mess: Taxes, report says

The country will outline its plans to manage the crypto-currency later this week, and could limit banks' handling of it.

Japan has plans to step in now that the Mt. Gox mess has affected Bitcoin owners all over the world, a new report claims.

The Japanese government by the end of this week will outline policies on regulating Bitcoin, Reuters reported, citing people who claim to have knowledge of its plans. A key component in that strategy could be to tax Bitcoin transactions, though it's unclear how the anonymous currency will be so easily taxed. In addition, Japan will limit banks and securities firms in their handling of Bitcoin by ensuring they don't take on the currency as the core aspect of their operations, the report says.

That Japan is moving to rein in Bitcoin is perhaps no surprise. Last week, Bitcoin exchange Mt. Gox filed for bankruptcy protection in the country after it was revealed that approximately $500 million in bitcoins were stolen from its service through a flaw. Mt. Gox has hopes to rebound, but whether that will materialize remains to be seen.

Regulating Bitcoin might prove to be an exceedingly difficult enterprise for Japan or any other country. The currency was specifically created to dodge tracking and maintain the anonymity of its owners. Still, Bitcoin has become a hot commodity in the online world and governments around the world are analyzing how they can tap into that, and both protect consumers and generate some of their own cash off the currency.

About the author

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

 

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