Virtual currencies to be called crypto-assets

TOKYO — Japan’s Financial Services Agency has decided to integrate the names of bitcoins and other virtual currencies, which are traded online as fictitious money, into a category called “crypto-assets,” according to The Yomiuri Shimbun.

Due to unclear issuers and with no evidence of value, the prices of virtual currencies fluctuate wildly.

Taking this into consideration, by calling all virtual currencies crypto-assets, the government hopes that traders will no longer purchase them believing |that they are legal tender recognized by the government.

Last week, an advisory panel to the agency compiled a report, pointing out that the term “virtual currency” could cause misunderstanding, and requested a change of the term.

Based on the report, the agency will revise relevant laws and regulations, such as the Payment Services Law, which stipulates the use of the description “virtual currencies”.

Virtual currencies, which are protected against counterfeiting by using cryptography, are commonly called “cryptocurrency” in English.

However, finance ministers and central bank governors of the Group of 20 major economies concluded at the meeting in March that such currencies “lack the key attributes of sovereign currencies,” and used the term crypto-assets to describe them.

The advisory panel’s report also underlined the need to establish a mechanism to protect users in the event of such problems as a cash outflow.

By revising relevant laws, the agency plans to request that companies that handle crypto-assets implement strict management systems.