Banks will also be prohibited from handling Bitcoins while securities companies will be barred from brokering Bitcoin trades.
According to Finance Minister Taro Aso, cited by online media outlet The Telegraph, Japans government is still trying to explain the collapse of Mt Gox - once the worlds once largest Bitcoin exchange. Mt Gox filed for bankruptcy protection in Japan saying it may have lost some 850,000 Bitcoins due to hacking into its faulty computer system.
Bitcoin is a form of digital currency that only exists online and is not controlled by any central financial authority, putting the control of the currency in the hands of the user. It allows people to transfer value to anyone, anywhere on the internet, without the traditional fees, commissions or currency exchange rates.
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