TOKYO: The Japanese government recently recognized the cryptocurrency Bitcoin as a legal form of payment, leading to a jump in the price of Bitcoin and opening up conversations about the future of the currency in international trade.
In October 2016, Japan decided to drop an 8% consumption tax that it had been levying on purchases of Bitcoin made in virtual currency exchanges. Now, with the legal status of Bitcoin firmly established in the country, adoption of the currency is expected to explode.
As reported by Nikkei Asian Review, two major Japanese retailers have announced partnerships with Bitcoin exchanges that could bring the currency to some 260,000 stores by as early as this summer. One of the retailers, Bic Camera, will let customers make purchases of up to 100,000 yen (roughly $904 USD) with Bitcoin, and will offer the same reward points as they would for traditional forms of payment.
It is important to note, though, that Bitcoin is still a very new technology, and one that not everyone is willing to trust. The bankruptcy of the Mt. Gox exchange in Tokyo damaged a lot of the trust in the currency itself, and highlighted some of the risks inherent to its deregulated nature, as noted by Investopedia.
Additionally, Bitcoin still isn’t supported in many countries. Russia and Bangladesh, for example, don’t view the cryptocurrency as legal, and other countries allow Bitcoin to be held but not exchanged.
Bitcoin’s potential for disrupting the financial market is huge. But, the biggest value of Bitcoin and its underlying blockchain ledger technology is the fact that they are decentralized in nature. And as big vendors seek to turn these products into sellable services, they could end up taking away their core value by making the centralized and heavily regulated.
