Japan will allow companies to send salaries to money transfer fund providers. However, it will not allow this for cryptocurrencies.
The Ministry of Health, Labor and Welfare in Japan has approved amendments to its Labor Standards Act, prohibiting the use of virtual currencies in digital wage payments. The amendment of the new rules will be effective from April 2023.
The amendment of the rules focuses on digital wage payments. Specifically, it allows payment of wages to the accounts of money transfer service providers. This includes forex services if certain requirements are met. The government has amended the law as “diversification of cashless payment and remittance services” has spread in the country.
However, the rule change does not include crypto assets. Salaries cannot be transferred to fund transfer companies in the form of crypto. Only those currencies that can be directly converted into cash.
This is not a complete ban on crypto as a means of paying salaries in Japan. The country may still change the rules in the future, perhaps when there is more regulation for the crypto market. Meanwhile, other countries are cryptic in salary payments.
Crypto, a popular choice for salary payments
Individuals in developing countries are resorting to cryptocurrencies to pay their wages. Argentina, Brazil and Turkey, as well as nations in Africa, are seeing their citizens accept bitcoin or the stablecoin because it is faster and cheaper for international money transfers.
International transfers have been one of the biggest selling points of crypto, as there are only minor losses for crypto transfers. As with traditional bank transfers, international transitions often cost 2-5% of the total amount transferred.
As remote working becomes more popular, people in developing countries may see even more adoption of crypto payments. Volatility remains popular, but it has also been falling in the crypto market, at least in recent weeks.
Japan Is Opening Up More to Crypto
While crypto for salaries may not yet be a reality in Japan, the government is making progress in other areas. Regulators in the country have recently relaxed laws relating to the crypto market, allowing crypto exchanges to list digital currencies more easily.
It has also tightened the rules related to money laundering. The country will monitor remittances that use crypto to prevent money laundering, mandating the sharing of customer information. The authorities can now confiscate the property as well. Japan aims to boost the economy by making the regulatory landscape more welcoming for startups.
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