Japan’s PM holds off on supporting Bitcoin as reserve asset
Despite interest expressed by a Japanese lawmaker earlier this month for Japan to establish a strategic Bitcoin reserve, the country’s prime minister has declined to offer support for the idea.
Insufficient information
Japanese crypto media outlet CoinPost reported on Dec. 26 that the country’s prime minister, Shigeru Ishiba, refrained from endorsing the notion of a Japanese strategic Bitcoin reserve on the basis that he and his government lack sufficient information on the subject. With that, Ishiba feels that it’s “difficult for the government to express its views” on the matter.
The Japanese prime minister was prompted to offer his views on the subject having been queried by Japanese Member of Parliament (MP), Satoshi Hamada. During a question and answer session earlier this month, Hamada cited the United States and Brazil as examples of states that are currently considering the addition of Bitcoin as a reserve asset.
The Japanese lawmaker suggested that policymakers in those countries were leaning towards the consideration of Bitcoin as a hedge against economic risks, and that on that basis, he believed that the Japanese government should give the use of Bitcoin as a national reserve asset consideration. Hamada stated:
“I think Japan should follow the example of the United States and consider turning some of its foreign exchange reserves into crypto assets such as Bitcoin.”
Ishiba has responded by stating that his government lacks sufficient information relative to this “movement of introducing Bitcoin reserves that the United States and other countries are proceeding with.”
Additionally, the Japanese government maintains that stability and liquidity are of paramount importance when it comes to the country’s foreign exchange reserves. With those factors in mind, it believes that Bitcoin is incompatible due to its price volatility.
Unsustainable debt levels
Some proponents of Bitcoin suggest that it offers a way forward for countries that have developed an unsustainable level of debt. In an X post published on Dec. 27, Thomas Jeegers, chief financial officer (CFO) at Swiss Bitcoin-only app enterprise Relai, set out a case for Bitcoin on that basis. Jeegers outlined that the United States has a debt of $36 trillion, accounting for 120% of gross domestic product (GDP).
He describes the Japanese scenario as being considerably worse, where the country’s debt accounts for 200% of GDP. Jeegers forecasts that the trajectory is unsustainable, with debt having grown “far beyond manageable levels.” The Relai CFO warns that the financial world is at breaking point and “it’s not a matter of 'if' but 'when' the system buckles under its own weight.”
Earlier this month, investment manager VanEck published a report claiming that a strategic Bitcoin reserve could facilitate the U.S. in reducing its national debt by up to 36% by 2050.
Like Japan, Russia has also decided against a strategic Bitcoin reserve. Although Finance Minister Anton Siluanov pointed towards Bitcoin’s unit price volatility being an issue, he is open to reassessing the matter in the future.
