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Japan will allow companies to send salaries to money transfer fund providers. However, it will not allow this for cryptocurrency.
The Ministry of Health, Labor, and Welfare in Japan has approved a revision to its Labor Standards Act, barring the use of virtual currencies in digital salary payments. The new rules’ revision will come into effect in April 2023.
The rules’ revision focuses on digital salary 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 revised the law because there has been a spread of “cashless payments and the diversification of remittance services” in the country.
The rule change, however, excludes 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 can.
This isn’t an outright ban on crypto as a means of salary payment in Japan. The country may yet change the rules in the future, perhaps when there is more regulation for the crypto market. Meanwhile, other countries are crypto in salary payments.
Crypto, a Popular Option for Salary Payments
Individuals in developing countries have been taking to cryptocurrencies for their salary payments. Argentina, Brazil, and Turkey, as well as nations in Africa, are seeing their citizens accept Bitcoin or stablecoins because it is faster and cheaper for international money transfers.
International transfers have been one of the biggest selling points of crypto, as there is only a marginal loss for a crypto transfer. With traditional bank transfers, international transitions often cost 2–5% of the total sum transferred.
As remote work becomes more popular, those in developing countries may see even greater adoption of crypto payments. The volatility remains popular, but this has also been dropping in the crypto market, at least in recent weeks.
Japan Opening Up More to Crypto
While crypto for salaries may not yet be a reality in Japan, the government has been making progress in other areas. Regulators in the country recently relaxed laws related to the crypto market, allowing crypto exchanges to list digital currencies more easily.
It has also toughened rules related to money laundering. The country will monitor remittances that use crypto to prevent money laundering, mandating the sharing of customer information. Authorities can now also seize assets. Japan aims to boost the economy by making the regulatory landscape more welcoming to startups.