The new definition would consider anything that can be exchanged for goods and services or legal tender as a currency. This would bring bitcoin, dogecoin and many other cryptocurrencies into the fold and would mean they could be more tightly regulated and taxed.

It remains unclear exactly what it would mean to have virtual currencies ‘fulfilling the functions of currency.’ The legislation would require they be available for ‘purchases or trades with an unspecified partner,’ which implies exchanges would have to register with the government. But while major regulatory action could bring stability to cryptocurrency markets, tighter government control could also seriously undermine their appeal.

Japan, the home of Mt. Gox, the bitcoin exchange that lost coins worth hundreds of millions of pounds when it folded in 2014, has been searching for ways to watch cryptocurrencies more closely and prevent another disaster. Former Mt. Gox chief executive Mark Karpeles is currently being held by Japanese authorities and has been charged with embezzlement. Sources: The Guardian; Inverse; Nikkei