Japan’s government has officially ruled out the adoption of Bitcoin as part of its foreign exchange reserves, citing concerns about volatility and a lack of sufficient understanding of global trends in cryptocurrency adoption.
On December 20, the government responded to a series of inquiries from Senator Satoshi Hamada regarding the possibility of Japan following the U.S. and other countries in incorporating Bitcoin into its reserves. The response, issued under Prime Minister Ishiba Shigeru’s name, clarified that Japan has no plans to consider cryptocurrencies for its reserves at this time.
Hamada, a member of the Party to Protect the People from NHK, had proposed that Japan explore Bitcoin reserves as other nations have begun to do. However, the government stated that it does not yet have enough knowledge about global movements in this area and emphasized that discussions on the matter are still in the early stages, making it “difficult to express a view” at this point.
The official statement further noted that cryptocurrencies, including Bitcoin, do not fall under Japan’s legal framework for foreign exchange reserves. According to Japanese law, cryptocurrencies are not classified as foreign exchange assets, nor are they considered “securities” under the Financial Instruments and Exchange Act.
Additionally, Japan’s Payment Services Act defines crypto assets and mandates that any crypto-asset exchange service (CAES) must register with the Financial Services Agency, with severe penalties for unregistered operations.
The government also reiterated that Japan’s foreign exchange reserves are focused on stabilizing foreign currency assets and bond markets. Given the inherent volatility of crypto assets, the government stressed its priority on maintaining safety and liquidity.
In related news, Akihiko Ogino, CEO of Japanese investment bank, has suggested the introduction of cryptocurrency exchange-traded funds (ETFs) in Japan. While Daiwa Securities, which manages the Nikkei 225 ETF, has not yet revealed plans for a crypto-backed ETF, the country’s current stance on digital assets may delay such initiatives.
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