Dive Brief:

• While there are no plans to create a regulating agency, the Japanese government will devise regulations to oversee and tax bitcoin as a commodity, rather than a currency.

• The move is in response to several officials from different agencies who have been asking their government for clarification on bitcoin’s status. The issue has gained urgency after the major, Tokyo-based bitcoin exchange Mt. Gox collapsed last week.

• In a bit of a turnabout from its early days, bitcoin advocates and investors say they welcome such regulations, which they now say are necessary if bitcoin is to survive.

Dive Insight:

Details on this move are preliminary and few — the Japanese government is said to begin this process Friday — but it looks like they will choose to regulate bitcoin as a commodity like gold or oil rather than as a currency. Under the Japanese proposals, sources said, would be some basic rules: Bitcoin used in retail transactions and capital gains from trading bitcoin would be taxed, the use of bitcoin would be limited or defined, and improvements to tracking bitcoin would be required. It's unclear how any Japanese regulation would influence other governments' treatment of the crypto-currency. Federal Reserve Chairwoman Janet Yellen just last week told a Senate Banking Committee that the Federal Reserve has no authority over the crypto-currency.