While the treatment of cryptocurrency in the larger world is a complicated issue in itself, one of the many aspects of this is the use of cryptocurrency when it comes to politics. In certain places such as California in the United States, cryptocurrency cannot be donated for political purposes and in some other places like Canada and Taiwan, they are acceptable forms of political donations and systems have been set up for their collection and processing. Still considering the fact that cryptocurrency is often wielded as a political tool, this matter is yet to be fully resolved across the board. 


On October 8, 2019, Sanae Takaichi, Japan’s internal affairs and Communications minister stated that donations and cryptocurrency and not controlled under the country’s political fund control act and this makes them rather unregulated. 

Unregulated Donations

The situation being confronted is mostly due to a technicality as the laws and Japan prevent politicians from receiving donations directly in fiat currency or securities. However, because cryptocurrency does not fall under those categories, it is not illegal and as such, can be used for this purpose. During the announcement, the minister was asked what will be done about the law and if some change will take place.

“Because addressing this problem would limit the political activities of politicians, this problem will be discussed by each party and each group,” she said. 

One of the dangers of excluding cryptocurrency from various financial laws is that situations happen like these when they fall through the cracks and can be used as a loophole against various laws. One of the most popular examples of this was cryptocurrency in relation to taxation as many tax authorities did not address cryptocurrency and as such, many crypto users and traders simply did not pay tax on cryptocurrency gains because they were not required to. When this was realized by the US regulatory bodies, the laws were adjusted to include cryptocurrency and it is possible that this will take place in the case of Japan as well.

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