NRI Report: Bitcoin Remittances being hold back by Japan's New Payment Rules

A forthcoming report from Nomura analysis Institute (NRI) argues that despite new rules geared toward bitcoin and digital currencies, additional must be done to bring clarity to the innovators operating with the technology in Japan.

Penned by senior authority Yasutake Okano, the report centers on the Payment Services Act (PSA), a bill glided by Japan’s legislative assembly in could. Debated for months, the bill brought domestic bitcoin exchanges underneath existing anti-money lavation (AML) and apprehend your client (KYC) rules by classifying virtual currencies as a kind of paid payment instrument.

But Okano argues the prostate specific antigen revisions do not go way enough, which any updates to the country’s Banking Act and monetary Instruments and Exchange Act are going to be required to clarify whether or not alternative promising use cases for the technology may be explored.

For example, the report notes that whereas the prostate specific antigen currently covers remittances in virtual currencies, this is often just for payments up to ¥1m ($9,557), the present limit for paid instruments.

The report reads:

"The PSA's ¥1m limit on transactions underneath its ambit is seen as undermining payment services' utility for cross-border transactions."

Okano additionally instructed that additional clarity is required on however the nation’s tax laws ought to treat virtual currencies, a move he aforementioned would bring Japan’s regulation in line with selections created by the eu Court of Justice.

He wrote that whereas Japan's tax code exempts sure trades in currency, checks and bills, this doesn't nonetheless apply to bitcoin and alternative digital currencies.

"There have been a lot of discussions on it," Okano said.

Elsewhere, the report found that the new restrictions are likely to serve as a "barrier to entry" for digital currency exchange businesses, though it suggested any downsides to this were likely to be balanced by a boost in consumer trust and adoption.