Due to the high volatility and uncertain legal nature of Bitcoin, the Japanese government rejected the proposed adoption of Bitcoin for foreign reserve funds.
Japan is known for its supportive stance towards the digital asset sector. In 2017, this country legalized Bitcoin as a payment method and also introduced a well-regulated regulatory framework for this innovative market under the Financial Services Agency (FSA). The FSA body guarantees investor protection and encourages innovation. This country is also known as a global hub for Bitcoin and Blockchain startups.
We recently reported that Senator Hamada, representative of the NHK Party to Protect the People, proposed that his country should use a small part of foreign reserves to buy Bitcoin because the Bitcoin and cryptocurrency sector is changing rapidly.
On December 26, 2024, the Japanese government received a response to this proposal. According to a statement from Prime Minister Ishiba Shigeru, the debate on “investment in Bitcoin in the form of foreign reserves” is in its early stages, so not much can be said about it in this situation.
Furthermore, the government clarified that the price of Bitcoin is not very stable, which is not good for the stability of the value of a country’s foreign reserves. Secondly, Bitcoin is currently not recognized as an asset, so how can the country adopt Bitcoin as a currency reserve?
The Prime Minister’s statement on this proposal reflects that the Japanese government is open to adopting innovative things, but is mainly concerned about the high volatility in the value of this innovative asset.
It is worth noting that the “Bitcoin Strategic Reserve” Act was first proposed in the US and has not been implemented or recognized by most states until now. So here we can say that the government of each country may have different opinions on Bitcoin and cryptocurrencies, but in the end, all countries will opt for Bitcoin adoption sooner or later under pressure from their peers.
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