Japan’s government expressed caution about holding Bitcoins as part of their national reserves. They cited concerns over its volatility and incompatibility legal frameworks with the current foreign exchange frameworks.
In an official reply on December 20, published under the name Shigeru Shiba as Prime Minister, the government answered a question by Senator Satoshi Hamada from the NHK Protection Party. Hamada, citing discussions similar to those in the United States and elsewhere, had asked the government to take into consideration converting a part of Japan’s forex reserves into cryptocurrencies.
Bitcoin does not qualify as foreign exchange
The answer stated that Japan does not have a detailed understanding of the movements taking place abroad. It also noted that global discussions regarding Bitcoin being incorporated into reserves are at an early stage. The government would find it difficult to comment on the specific circumstances, the statement said.
The government confirmed that crypto assets, such as Bitcoin, do not meet the definition of foreign exchange under current regulations. It also stated that Japan’s reserves were designed to stabilize foreign-currency assets and bond markets. Officials reiterated the importance of safety and liquidity. They also said that the volatility of cryptocurrencies was incompatible with Japan’s reserves strategy.
Jerome Powell of the Federal Reserve confirmed in the United States that the Fed can’t hold Bitcoin. According to reports from Republican lawmakers and President-elect Donald Trump, they are pushing for the establishment of a strategy Bitcoin reserve.
