Japan's government has said that Bitcoin, a virtual currency created, or mined through complicated computer algorithms, is not a currency but that some transactions using the virtual unit should be taxed. Japan also said banks cannot provide Bitcoin as a product to customers. The Japanese government is trying to determine the total volume and value of Bitcoins in circulation around the world.

What this means for you

Countries and their tax authorities have been grappling with how to regulate Bitcoin, with some seeing it as a route for tax evasion or money laundering. Russia has declared Bitcoin transactions illegal, China has banned its banks from handling Bitcoin trades and there have been calls for the US to do the same, and Singapore has imposed a tax on Bitcoin trading and using the currency to pay for services. In Europe, consumers have been warned of the possible risks of buying, trading or holding virtual currencies such as Bitcoin by the EBA, the European financial regulator.