In a move to improve transparency and ensure consumer safety, Japan's cabinet has approved new regulations relating to cryptocurrencies such as bitcoin. The new regulations recognize bitcoin as a legal form of payment fulfilling the functions of currency.
Currently, Japan has no laws on virtual currencies and effectively treats them as “objects”, Nikkei reported. Although bank deposits are protected by the Deposit Insurance Act, the country has no rules that require exchanges to set aside funds in case of bankruptcy. A Financial Services Agency official further noted that not all exchanges conduct external audits or segregate their own assets from those of customers.
http://www.econotimes.com/Japans-Cabinet-Approves-New-Bitcoin-Regulations-173554
