U.S., Japan, China Spearhead Bitcoin Regulations (June 16, 2015)
The U.S., Japan and China are working on regulations to prevent the use of digital currencies, such as bitcoin, from being used to finance illegal activities or terrorist organizations, according to Japanese newspaper Nikkei. The three countries are part of the Financial Action Task Force (FATF) and are urging other members of the FATF to develop and implement the first international framework for decentralized virtual currency regulations.
The FATF is an intergovernmental body with 31 member countries, and it sets standards and promotes effective implementation of regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the international financial system. The FATF, as a whole, wants better oversight for bitcoin and other virtual currencies, including identity verification for users who use “virtual wallets,” according to reports.
Several state and national governments have been issuing guidance and regulating bitcoin independently for the past few years. For example, in the U.S. last year, FinCEN expanded on its March 2013 guidance regarding conversion of digital currencies and whether such activity falls within the BSA’s definition of a money transmitter. This month, the New York State Department of Financial Services (NYDFS) finalized the U.S.’s first comprehensive state-level framework for regulating digital currency firms. In India, several bitcoin exchanges were shuttered after the country’s central bank warned of bitcoin-related risks. In Singapore, the revenue authority released guidance for how to handle capital gains, earnings and sales tax on bitcoin transactions.