The government of Japan has officially stated that it will not adopt Bitcoin as part of its foreign exchange reserves. This decision was communicated in response to inquiries from Senator Satoshi Hamada, who had suggested that Japan consider following the lead of countries like the US in exploring Bitcoin reserves.
Prime Minister Shigeru Ishiba stressed that the government does not know enough about Bitcoin and similar crypto. He pointed out that these assets' intrinsic volatility renders them inappropriate for foreign exchange reserves, which are meant to stabilize currency-denominated assets.
According to Japanese law, crypto do not qualify as foreign exchange assets. The Financial Instruments and Exchange Act does not classify them as securities. This legal context further complicates the potential for integrating Bitcoin into national reserves.
Safety and liquidity are given top priority in the foreign exchange management plan of the Japanese government. According to Ishiba, the government favors traditional, stable assets with high liquidity and repayment certainty, such as deposits with foreign central banks.
Japan's refusal to include Bitcoin in its reserves reflects a broader skepticism towards crypto as reserve assets. While other countries explore integrating digital currencies into their financial strategies, Japan remains careful, potentially limiting its influence in the evolving global market for crypto.
This decision may also delay any initiatives related to crypto ETFs within Japan.
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