Bitcoin is being traded in the Japanese exchange market at a high premium. While the rest of the global market with the exception of South Korea stabilized at the $1,730 region, the Bitcoin exchange market is still continuing to process orders at an average Bitcoin price of $1,835.
Since the Japanese government’s approval of the Bitcoin legalization bill on April 1, Bitcoin price has been on an upward trend. The legal clearance from the Japanese government coincided with the approval of a bill which exempts Bitcoin from consumption tax.
According to Deloitte Japan, the Japanese National Diet passed a series of tax reform bills in March which will effectively exempt Bitcoin from consumption tax starting July 1.
In a document to its clients entitled “Japan: Inbound Tax Alert, 2017 Reform Proposals,” Deloitte wrote:
“The supply of virtual currency will be exempt from Japanese Consumption Tax (“JCT”). Currently, virtual currencies such as Bitcoin do not fall under the category of exempt sales, and as a result, the sale of virtual currencies in Japan have been treated as taxable for JCT purposes. Following the enactment of the amended Fund Settlement Law in May 2016, which newly defined “virtual currency” as a means of settlement, the sale of virtual currency as defined under the new Fund Settlement Law will be exempt from JCT. This change will apply to sales/purchase transactions performed in Japan on or after 1 July 2017.”
The legal status of Bitcoin in Japan
Within a one-month period, investors and traders were told that Bitcoin is absolutely legal under existing laws in Japan. It is considered a legal tender in the country and that the government will officially exempt consumption tax at least by July 1.
Such positive outlook on Bitcoin and the Japanese government’s optimistic regulatory approach toward Bitcoin led to the explosive growth and development of the Japanese Bitcoin industry and market.
Demand for Bitcoin continued to rise as some of the influential brands in Japan including Bic Camera started to accept Bitcoin as an over-the-counter payment method. Customers started to pay for electronics in Bic Camera retail outlets using Bitcoin.
Bic Camera’s acceptance and integration of Bitcoin was a much larger national sensation in Japan than how it was actually perceived and reported elsewhere. Bic Camera operates massive centers and electronics outlets that are located in the most active and expensive parts of Japanese cities.
As soon as Bic Camera started to accept Bitcoin and promote the digital currency, local mainstream media quickly picked up the news and Bitcoin started to appeal to a large group of high profile, institutional and general investors and consumers.
Demand for Bitcoin in Japan continues to grow
Bitcoin’s growth in Japan didn’t stop there. Some of Japan’s largest multi-billion dollar financial institutions and technology conglomerates have announced the launch of digital currency exchanges and have expressed their optimism toward the global bitcoin exchange market. The validation from the country’s most prominent and dominant corporations gave more confidence to Bitcoin investors and traders.
Currently, the Japanese Bitcoin exchange market is one of the only markets to operate exchanges without fees. Thus, Japanese Bitcoin exchanges such as Bitflyer have demonstrated daily trading volumes and its dominance over the global Bitcoin exchange market.
As long as the demand for Bitcoin in Japan continues to increase at this pace, the Japanese Bitcoin exchange market will continue to demonstrate a high premium over other markets.