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Now that bitcoin has been recognized as a medium of exchange, rather than a commodity subject to certain taxation in Japan, is it the only such one other than the Yen?
Since the pronouncement of course falls far short of declaring bitcoin legal tender, does it in effect mean anything other than it is now legal to operate an exchange?
Edit: I reworded the original question, as I had incorrectly equated the terms "form of payment" and "medium of exchange".
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TL;DR: Bitcoin has been declared a legal form of payment which is not the same as an official currency.
I think that it may not be clear what a "legal form of payment" means and how this differs from the official currency of a country.
"Currency" usually refers to a form of money issued by a government, which makes "cryptocurrency" a misnomer to some degree.
Currencies generally have a high level of protection and status in their country, for example the nation requires the taxes to be paid in terms of the currency and usually requires its population to accept the currency as a means of payment. However, first and foremost the currency defines the unit of account that is being predominantly used in the country.
Yet, nations recognize a number of different ways to settle obligations explicitly which are sometimes called "legal forms of payment". These may be different forms of transferring the nation's currency, but can also be other forms of money. For example, if you are using a form of money that the nation has not recognized as legal form of payment, in the case of legal dispute it may first need to be established whether the payment was valid in the first place, and if the payment is not recognized as such, the value may be lost.
Some examples of legal forms of payment are cash, money orders, checks, and wire transfers, and in most countries also digital payment networks such as PayPal. Although uncommon, payments settled in foreign currency will also be recognized. In some regions around the world there are local currencies that aim to encourage commerce in their region. Often these regional currencies are tied to the national currency, but given out at a discount, e.g. the Reka-checks can be bought by employees in Switzerland for 3-20% less than their face value but only used to pay for tourism services in Switzerland.
To my understanding, what happened in Japan a few days ago was the recognition of Bitcoin as a legal form of payment. This does not give Bitcoin a special status, except that value transfers performed with Bitcoin are now explicitly recognized as payments in Japan. Similar things have happened in the past, e.g. when Germany declared that Bitcoin would be treated alike to a complementary currency, or (IIRC) Belgium declared that it would treated like foreign currency.
An overview of the current legal status of Bitcoin in the world can be found on Coin Dance.
Note: I'm neither a lawyer, nor an economist.
Was it illegal to pay for something in bitcoin before the government's announcement? – Tom Russell – 2017-05-04T17:13:36.150
I edited my question to reflect this astute if rather unkind answer. It didn't address the gist of my question. – Tom Russell – 2017-05-04T17:36:58.420
@TomRussell: It was unregulated, but probably not illegal. Now it is explicitly legal to use. Legal forms of payment in Japan are likely to be some subset of cash, credit cards, checks, wire transfers, online payment services like PayPal– and now Bitcoin. – Murch – 2017-05-04T18:41:52.797
You've gotta be yanking my blockchain. – Tom Russell – 2017-05-04T21:17:30.233
It seems to me that you were expecting something very different. It's it possible that you were thinking of legal tender instead of legal form of payment? Perhaps, I don't understand your question correctly. In that case could you please clarify what you were expecting to get more information on? – Murch – 2017-05-04T22:34:19.087
Yes, quite. It was difficult for me to see a bitcoin expert conflate it with checking, card and wire payment services. I've edited my question include the notion of legal tender. – Tom Russell – 2017-05-05T05:19:02.513
Familiarizing myself a bit with the subtleties of bitcoin's regulatory status has been eye-opening. What a mess! – Tom Russell – 2017-05-05T05:50:51.203
"Conflate"? I'm not saying it's the same, I'm just trying to point out that Japan has merely attested to Bitcoin's capacity of transferring value, but not bound itself to Bitcoin as an official state money. – Murch – 2017-05-05T12:53:15.817
I think we're just discussing two different things. To me, nearly anything of perceived value is a "medium of exchange". And likening bitcoin to credit cards is analogous to asking "How many credit cards does this cost?" – Tom Russell – 2017-05-06T09:43:51.043
Bitcoin is various things. It is a communication network, a community, a protocol, and a form of money. It's money aspect shares some characteristics with foreign currencies or complementary forms of money. Primarily interesting to governments seems to be the capacity of performing payments with Bitcoin. This is what they take a position on, when they declare Bitcoin to be a legal form of payment. They are merely saying that they recognize value has been transferred when somebody pays with Bitcoin, just like they would when someone settled their due with a credit card. – Murch – 2017-05-06T15:30:56.130
I don't think that the storage of value aspect where bitcoins are not denominated in Yen played a major role in this assessment, but tbh I haven't read much about the news, because similar assessments have been made in many countries in the past years. – Murch – 2017-05-06T15:32:07.030
I thought I had a pretty good idea what bitcoin is from watching numerous presentations by Antonopoulos and others. But the more you say the less sure of that I am. While your remarks are obviously informed, I find them to be subtly confusing. Maybe it's just the attempt to get too much information into a constrained format. – Tom Russell – 2017-05-06T18:58:22.857
Hello Tom, I've updated my answer and hope that it is more helpful now. – Murch – 2017-05-06T21:15:23.510
Better, I guess. But it still contains this idiotic notion that checks are a different form of payment than cash. Like I said before, you gotta be yanking my chain. – Tom Russell – 2017-05-09T04:01:16.910
They are. E.g. they differ by one being instant settlement and the other being a payment promise that first needs to be executed by the recipient's bank, often at additional cost to the recipient. Obviously they can both be denominated in the same unit of account, but that doesn't make them the same form of payment. – Murch – 2017-05-12T15:40:31.260
Very interesting. Would you call a bank cheque a "medium of exchange?" How about a credit card or wire transfer? – Tom Russell – 2017-05-16T05:08:52.497
No, I wouldn't. I'm not exchanging any of them for something else, the check merely represents an order for the bank to execute a payment. A wire transfer is the execution of a payment itself, while a credit card is a tool of authentication. – Murch – 2017-05-16T05:12:34.023
OK. So this entire discussion has been based on my possibly-incorrect assumption that "form of payment" and "medium of exchange" were essentially equivalent terms. My mistake? – Tom Russell – 2017-05-16T05:15:24.847
Yeah, I'd perceive these two as completely separate concepts. Medium of exchange is the property of money that it's widely accepted as a standard of value, on the other hand, form of payment is a specific method of value transfer. – Murch – 2017-05-16T05:18:10.587
Yikes! You have my sincere apology for the confusion. – Tom Russell – 2017-05-16T05:22:02.050
No problem, we finally found out where the communication was going astray. Yay! ;) – Murch – 2017-05-16T05:24:34.270
Where this recognition is published?? There no such thing axept in some crypto news website !! Do you have any official source? – Badr Bellaj – 2017-05-03T11:27:15.580
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LMGTFY: http://www.cnbc.com/2017/04/12/bitcoin-price-rises-japan-russia-regulation.html
– Tom Russell – 2017-05-03T17:27:13.827