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And now, this: Japan to Regulate and Tax Bitcoin

TOKYO -- The Japanese government will set rules for trading bitcoins, defining the virtual tender not as a currency but as a commodity akin to gold.

Gains from trading bitcoins on online exchanges, and purchases made with them will be subject to Japanese tax. Banks will be prohibited from handling them, and securities firms will be barred from brokering Bitcoin trades.

Since its origin in 2009, Bitcoin has occupied a legal gray zone. But the cryptocurrency has arguably become too big for regulators to ignore. The value of bitcoins in circulation worldwide at one point reached 1 trillion yen ($9.75 billion).

Japan will become the first major economy to attempt to regulate the virtual currency and may prompt others to move in the same direction. Last week, Mt. Gox, a Tokyo-based Bitcoin exchange, filed for bankruptcy, drawing attention to the issue of protecting users.


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