Japan’s Prime Minister Hesitates on Bitcoin as Foreign Exchange Reserve
Japan’s Prime Minister Shigeru Ishiba expressed caution regarding the adoption of Bitcoin as part of the country's foreign exchange reserves. He cited a lack of clarity about the strategies of other nations, particularly the United States, as a reason for this hesitance, according to CoinPost.
Ishiba stated, “It is difficult for the government to express its views,” highlighting insufficient information on the strategic plans of countries exploring similar initiatives. His comments followed a suggestion from Satoshi Hamada, a Councilor with the Party to Protect the People from NHK, who urged Japan to consider adding Bitcoin to its reserve assets.
Hamada advocated for Japan to emulate the United States by converting some foreign exchange reserves into cryptocurrency, aligning with global discussions about cryptocurrencies in national financial systems.
“Japan should follow the example of the United States and consider turning some of its foreign exchange reserves into crypto assets such as Bitcoin,” Hamada argued.
Why Japan Avoids Crypto in Reserves
Prime Minister Ishiba noted that Japan's laws governing special account operations do not classify cryptocurrencies as foreign exchange. Instead, reserves are allocated towards stabilizing foreign construction assets and supporting the bond market.
The management of special accounts emphasizes safety and liquidity through assets like government bonds or deposits with foreign central banks. Cryptocurrencies lack the necessary liquidity and repayment certainty for these accounts.
“In the operation of special accounts, to smoothly conduct necessary foreign exchange transactions to realize the stability of the Japanese currency’s exchange rate, we operate with maximum consideration for safety and liquidity,” said Ishiba.
In contrast, other nations are exploring Bitcoin reserves. On November 25, Brazilian Congressman Eros Biondini introduced a bill for a sovereign Bitcoin reserve named RESBit. US Senator Cynthia Lummis has also proposed a Bitcoin reserve to reduce national debt and enhance geopolitical influence.
Bitcoin Reserve Debate Heats Up
Debate continues regarding the concept of a Bitcoin reserve. Critics like Miles Jennings view it as “a transfer of wealth from the U.S. government to holders of BTC,” claiming it primarily benefits profiteers. Conversely, Michael Saylor of MicroStrategy suggests replacing gold reserves with Bitcoin could improve fiscal strategy.
Ripple CEO Brad Garlinghouse anticipates strong demand for a yen-backed stablecoin but notes Japan has not made definitive moves yet. “People will want to hold yen stablecoins, and I think that is only a matter of time,” Garlinghouse remarked, expressing cautious optimism about Japan's future in the crypto space.
Japan's measured approach reflects a focus on regulatory clarity and market stability, which currently keeps Bitcoin outside its official reserves.