By 2023, Japan Plans to Allow Digital Salary Payments

Companies and firms in Japan will soon be able to pay employees using money transfer fund vendors. Cryptocurrencies, meanwhile, are not permitted.

Amendments To the Labor Standards Act

The Ministries of Japan have approved a change to the Labor Standards Act. These include the nation’s ministries of welfare, labor, and health. 

The Act forbids the administration of digital salary payments using virtual currency. Starting in April 2023, the amended requirements will have to be followed.

The new rules will encourage the use of electronic technologies for salary payment. To be more precise, it permits salaries to be sent to the accounts of money transfer companies. 

It also covers foreign exchange services, provided that specific prerequisites are met beforehand. The government changed the legislation to reflect the growing popularity of “cashless payments and the range of remittance services.”

However, the modified restrictions do not apply to cryptographic assets. Payment of salary to money transfer companies in cryptocurrency is not permitted. 

Only readily converted currencies are permitted. However, it does not entirely bar Japan from using cryptocurrencies for salary payments. 

The government might change the rules in the future. Once the cryptocurrency market is more tightly controlled, this could become clear. Several governments have started utilizing cryptocurrencies for labor payments in the meantime.

It’s Increasingly Common to Receive Compensation in Cryptocurrency

Payments made using cryptocurrencies are becoming increasingly common in emerging nations. For example, people accept cryptocurrency and stablecoins as payment in Argentina, Turkey, Brazil, and Africa. 

This is a result of more affordable and rapid worldwide transmission methods. As a result, one of the most common applications of cryptocurrencies nowadays is for international transactions. 

This is due to the minimal level of loss associated with bitcoin transfers. Fees for international transfers typically vary from 2 to 5 percent of the total amount. 

When utilizing traditional bank transfers, this is evident.

People who live in developing countries could see a rise in the usage of cryptocurrency payments. As the practice of remote working spreads, this will become increasingly obvious. 

Volatility in the crypto market has been decreasing, even though it is still prevalent. At least during the previous several weeks, the volatility problem has diminished.

Japan Becomes More Receptive to Crypto

It is currently not feasible in Japan to accept cryptocurrencies as payment for salaries. However, the administration has made progress in some other areas. 

Regulators in the country have just lately loosened a few limitations. These limitations apply to the cryptocurrency industry as well. This enables digital listing currencies on cryptocurrency exchanges easier.

Additionally, it has strengthened the regulations governing money laundering. The country will keep an eye on cryptocurrency-based transactions. 

To stop the laundering of criminal cash, Japan would also mandate the publication of customer information. Additionally, the government now has the power to seize assets. 

By fostering a regulatory framework that is more accommodating to new firms, the Japanese government hopes to promote the economy.

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