Will Bitcoin become Official Currency in Japan and Australia?

The network was informed that politicians from Australia proposed to recognize bitcoin as the official currency. The topic initiated by the Australian news portal was picked up by global and Polish cryptocurrency portals. Therefore, a discussion began on whether bitcoin is gaining status equal to international currencies.

We can find such conclusions, among others on portals devoted to bitcoin (in this case, I refer to the website bithub.pl).

By definition, a currency is a monetary unit that is the basis of a financial system in a given country. A particular cryptocurrency could only become a full-fledged currency if a country equated its status with its federal money, which is a scenario that is hard to imagine.

What is the status of cryptocurrencies in Japan?

In Japan, bitcoin-is-profits-trading currency and recognized as a means of payment and an equivalent of foreign currencies, which does not mean that it has received the status equal to foreign currencies.

Bitcoin, in the Japanese law, which entered into force on April 1 this year, is not treated as a legally recognizable currency, but rather as an asset used as a means of payment.

It is also difficult to say where the information about the possibility of paying taxes with bitcoin came from because the Act mentioned above only excludes cryptocurrencies from taxation on consumption tax. Although bitcoin is a full-fledged means of payment in Japan, this does not mean that the tax office will accept cryptocurrency payments. Securities denominated in the national currency are also full-fledged means of payment, which does not expect that we will pay the tax with shares or bonds.

Australian Sensation

In the context of the sensation associated with the proposal of Australian politicians, it is worth noting that the content published on bitcoin portals is based on the material posted by The Sydney Morning Herald. The author of the article – Eryk Bagshaw – uses the phrase embrace bitcoins as an official form of currency, which can be read as recognition of bitcoin as an official form of currency.

The first question is whether the phrase was used by either of the two politicians, as it is not marked as a quote in The Sydney Morning Herald. The second doubt concerns whether the politician using these words (if it was a quote) did not accidentally abuse the concept of a currency that is not the same as money. It should be noted here that from June this year, bitcoin is recognized in Australia as a means of payment. This may exclude politicians’ mistake, with the last doubt being what they meant by the official form of the currency, because it should be considered that this is not the same wording as the currency itself.

The article by Eric Bagshaw itself concerns two senators, Sam Dastyari and Jane Hume, who, as representatives of two different parties, appealed to the central bank to ‘recognize bitcoin as the official form of currency’ and devote more attention to blockchain technology. Senator’s point out that digital money like bitcoin has become a big part of the financial market and Australia is risking falling behind. To sum up, recognizing bitcoin and other cryptocurrencies as a means of payment in Japan or Australia does not mean that cryptocurrencies have or will have the status equal to national currencies.

Is the broader use of bitcoin in everyday life beneficial for speculators?

Paradoxically, the greater possibilities of using bitcoin as a means of payment do not mean that the rate of this cryptocurrency would grow. It should be remembered that speculative factors are currently responsible for the significant increase in the cryptocurrency exchange rate. People investing in cryptocurrencies are most often not interested in using them in everyday payments, but only obtaining profit from increasing its value. In a situation where an increasing number of participants in the cryptocurrency environment will use cryptocurrencies to pay for goods and services, the speculative factor will become less significant.

At the current stage of cryptocurrency operation, even widespread acceptance of their use in local exchange does not imply that they will be accepted in the wholesale exchange between entrepreneurs.