Japan Takes a Firm Stance on Bitcoin Reserves
Japan is exploring the potential of cryptocurrencies due to their increasing popularity, prices, and trading volumes, similar to many major investors. However, the Japanese government maintains a cautious approach to holding Bitcoin as a national reserve. The main reasons for this include the volatility of the cryptocurrency and legal inconsistencies.
In an official statement on behalf of Prime Minister Shigeru Ishiba, responses were given to questions regarding Bitcoin reserves raised by Senator Satoshi Hamada, a member of the NHK Protection Party. Hamada pointed to similar discussions in the United States and other countries, suggesting that the Japanese government should consider converting a portion of its foreign currency reserves into cryptocurrencies.
According to the government's response, global discussions on adding Bitcoin to reserves are still in their early stages, and Japan is largely lacking in understanding such activities. The statement also highlighted that "It would be difficult for the government to express an opinion on the specific situation on the agenda."
It was reiterated that cryptocurrency assets do not currently qualify as foreign currencies under existing laws, and Japan's reserves are designed to support bond markets and assets in foreign currencies. Officials noted that the extreme volatility of cryptocurrencies is not compatible with Japan's reserve policy, which emphasizes reliability and liquidity.
Japan's Perspective on the Crypto Sector While Japan is globally recognized for its innovation, the government's stance on cryptocurrencies remains ambiguous, and there is currently no clear plan for Bitcoin acquisition in the country. Nevertheless, according to existing information, Japan is among the first countries to recognize cryptocurrency assets as a digital payment method under the Payment Services Act (PSA).
Recently, discussions led by Prime Minister Shigeru Ishiba have centered on Japan's cryptocurrency taxation policy. Significant tax changes are part of a planned economic stimulus package expected to be approved by the end of 2024.
Japan has also adopted a firm regulatory approach emphasizing consumer protection and innovation for stablecoins. The country has established a robust regulatory framework by restricting stablecoin issuance to licensed financial institutions. On the other hand, it is collaborating with international organizations to ensure seamless cross-border transactions and create uniform standards worldwide.
Cryptocurrency Adoption and Fraud Cases in Japan By 2025, Japan is expected to have 19.43 million cryptocurrency users, with the sector projected to grow up to $1.3 billion. The United States, on the other hand, leads the global cryptocurrency revenue with sales exceeding $9 billion.
Notably, XRP has surpassed Bitcoin as the most traded cryptocurrency in Japan, with over 837.1 million units traded. Following XRP are Oasys, Astar, Dogecoin, Avalanche, Solana, and Ethereum.
Cryptocurrency-related fraud cases account for 9.9% of a total of 6,868 recorded investment fraud incidents, resulting in a loss of 64.14 billion yen ($424.97 million).