Japan’s Stance on Bitcoin Reserves: A Clear Rejection

The Japanese government has officially responded to Senator Hamada, stating that it does not intend to accept Bitcoin as part of its foreign exchange reserves due to concerns about volatility and lack of understanding.

On December 20, the Japanese government published its official response to various questions raised by Senator Satoshi Hamada regarding the adoption of Bitcoin (BTC) as part of Japan’s foreign exchange reserves, a Japanese media outlet reported. In the statement made under the name of Prime Minister Ishiba Shigeru, it was announced that Japan does not intend to take cryptocurrency reserves into account at this time.

Senator Hamada, a member of the Party to Protect People from NHK, made a suggestion for Japan to follow the example of the United States and other countries exploring BTC reserves. The government responded by saying it did not have enough information about global movements in this regard and said discussions on adopting cryptocurrencies for reserves were still in their infancy. So, at this point, the government said that “it would be difficult to express an opinion” on this issue.

The response also stated that under Japan’s legal system for private account management, cryptocurrencies such as BTC do not fall into the category of foreign exchange assets. Moreover, a “crypto asset” is not considered a “security” under Japanese law under the Financial Instruments and Exchange Act.

The Payment Services Act provides the definition of “cryptoassets” and requires any cryptoasset exchange service (CAES) provider to register with the Financial Services Agency. Anderson Mori & Tomotsune, a full-service law firm in Japan, says operating CAES without registration attracts criminal penalties.

Existing foreign exchange reserves are intended to stabilize foreign currency-denominated assets and bond markets, and the Japanese government has highlighted volatility in crypto assets as it seeks to prioritize security and liquidity.

Besides this, the CEO of Japanese investment bank Akihiko Ogino suggested that Japan should introduce cryptocurrency exchange-traded funds. While Daiwa Securities, which manages the Nikkei 225 ETF, has yet to announce plans for a crypto-backed ETF, Japan’s current perspective on crypto assets could delay Daiwa Securities’ ETF plans.