In Japan, the Ministry of Health, Labor, and Welfare has authorized a revision to the Labor Standards Act that prohibits the use of digital currencies in digital salaries and wages. The new rules will be implemented in April 2023.
This new regulation emphasizes digital salary payments. It effectively allows wage payments to the money transfer service providers' accounts. If specific criteria are met, this involves forex services. Because of the increase in cashless payments and the expansion of remittance services in the country, the government amended the law.
However, crypto assets are not included in the rule change. Salaries cannot be relocated in cryptocurrency to fund transfer companies. Only currencies that can be transferred straight into cash can be used.
This isn't an official ban on using cryptocurrency to pay your salary in Japan. The country may modify the regulations in the future, perhaps when the market is more regulated. Meanwhile, other nations are using digital assets to pay their employees.
A Popular Salary Payment Option
Individuals in emerging regions have begun to use cryptocurrencies to pay their salaries. Argentina, Brazil, Turkey, and Africa are now seeing their people accept Bitcoin or stablecoins because they are quicker and less expensive for international money transfers.
International transfers have become one of cryptocurrency's most compelling selling points, as they incur only a marginal loss. International transfers via traditional bank transfers typically cost 2-5% of the total amount transferred.
Japan is becoming more open to cryptocurrency
While the proposed regulation is not yet a reality in the country, the government has made strides in other areas. Regulators in the country have lately settled crypto-related laws, making it easier for exchanges to list digital currencies.
It has also tightened money-laundering regulations. To prevent this, the government will monitor cryptocurrency remittances and require sharing of customer information. Authorities can now seize assets as well. Lastly, the country also intends to boost the economy by creating a regulatory environment more welcoming to startups.
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