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Japanese Government Approaches Bitcoin with Open Mind

Mineyuki Fukuda, a 50-year-old second-term lawmaker with the Liberal Democratic Party (LDP) in Japan, is tasked by Prime Minister Shinzo Abe’s administration with trying to figure out what exactly Bitcoin is, what its capabilities are, and how to regulate it.

The young (by Japanese lawmaker standards) parliament member has so far done a great job of not only learning about Bitcoin but also insisting on a hands-off approach—not encouraging or rushing into hastily created policy or regulation.

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Fukuda’s wise handling of Bitcoin has been the envy of entrepreneurs and Bitcoin insiders everywhere. Not only has he stepped back and used a more passive approach (rather than the all-to-familiar aggressive or reactive one), he has also utilized the industry’s own paths and avenues to learn as much as possible about Bitcoin and all of its players.

As a government official, his hands were a bit constrained by a lack of funding, so he turned to the industry for a bailout (or perhaps I should say bail-in) and launched an online crowdfunding campaign to access the financial means to conduct proper research on the Bitcoin industry in the United States.

The lawmaker is surprisingly candid about Bitcoin and what he’s learned so far, quoted by Bloomberg as saying, “To me, Bitcoin isn’t just a form of money.” He continues to discuss how Bitcoin’s online registry Blockchain, which helps prevent counterfeiting, is even more impressive, not only for its connection to Bitcoin but for what it could do for government.

Fukuda has made some intelligent moves so far, especially by intentionally keeping Bitcoin’s official description in a somewhat gray area to help facilitate its growth. The point is to keep Bitcoin’s language obscure and vague so that it doesn’t “cross over” into any current Japanese banking laws. In other countries, lawmakers have lazily framed Bitcoin as a currency or commodity, thereby forcing it into already present rules and regulations. Fukuda has been more imaginative in this respect, carefully labeling Bitcoin as a “digital recorded value.”

In August, Fukuda helped create the Japan Authority of Digital Assets (JADA) with Yuzo Kano, an ex-Goldman Sachs trader. The point of this independent organization is an exercise in self-regulation. Since its inception, five companies have come on board.

Moving forward, it looks like the only obstacle is the election cycle. In order to keep Fukuda in his current role he has to win a snap general election which has been called for on December 14.

Forget for a moment any opinions you may have on “Abenomics,” it’s rather surprising (and admirable) that Prime Minister Shinzo Abe’s government has taken such an open-minded approach to Bitcoin. It’s rare, especially in Japan, that a government would go to such lengths to keep something free of regulation without big money interests heavily involved.

Small business owners everywhere should stand up and applaud. You have finally won something, for now.

H/T: Bloomberg