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Cryptocurrency News Articles
Japan Prioritizes Stability Over Bitcoin in Foreign Reserves
Dec 26, 2024 at 08:30 pm
The Japanese government has expressed caution about holding Bitcoin in its national reserves. Cryptocurrencies such as Bitcoin are not considered foreign exchange.
Japan has expressed caution about holding Bitcoin in its national reserves due to the cryptocurrency’s volatility. The government instead prioritizes stability and security in foreign exchange reserves, ensuring that they are liquid and secure.
The Japanese government has stated that cryptocurrencies such as Bitcoin are not considered foreign exchange under current laws. Foreign exchange reserves are intended to stabilize markets and assets in foreign currencies, and the government maintains strict standards for their safety and liquidity.
In response to a question by Senator Satoshi Hamada on December 20, the government stated that it is not clear whether countries like the United States have included Bitcoin in their foreign exchange reserves. The government added that discussions about Bitcoin reserves are still in the early stages in many places.
“We have not confirmed the details of other countries’ handling of any Bitcoin reserves,” the government stated.
Japan Prioritizes Stability Over Bitcoin in Foreign Reserves
The government’s response to Hamada’s question also highlights Japan’s cautious approach to cryptocurrencies. The country’s Financial Services Agency (FSA) has been cracking down on cryptocurrency exchanges and warned investors about the risks of digital assets.
Prime Minister Shigeru Ishiba’s response shows that Japan is carefully considering the implications of adding Bitcoin to its foreign reserves. However, given that Bitcoin’s price is highly volatile, it would be counterproductive to the goals of a government-run reserve system.
“We quickly learn that Bitcoin’s extreme volatility would contradict the goals of any reserve system run by a government,” the prime minister stated.
Federal Reserve Chairman Jerome Powell stated recently that the Federal Reserve cannot hold Bitcoin in the United States. However, President-elect Trump and some lawmakers favor setting up a Bitcoin reserve instead. This indicates that the idea is more openly discussed in some countries than in others.
“Trump administration officials are discussing setting up a U.S. government Bitcoin reserve,” Powell said.
Japan, on the other hand, is taking a more cautious approach, expressing concern about the risks posed by Bitcoin and other cryptocurrencies. While some countries are considering adding Bitcoin to their reserves, Japan appears to be prioritizing stability in its foreign exchange reserves.
“Some countries are considering holding Bitcoin as reserves, but Japan is aiming to ensure stability in its foreign exchange reserves,” the government stated. “The government wants to make sure that any new changes do not disrupt the economy.”
At the moment, Japan is not keen on adding Bitcoin to its national reserves.
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