Japan Won’t Follow US to Establish Strategic Bitcoin Reserve, Says Cryptos Aren’t Foreign Exchange

The Japanese government has made its stance on Bitcoin clear, responding officially to a proposal from Senator Satoshi Hamada.

Japan has officially responded to a proposal made by Senator Satoshi Hamada, regarding the inclusion of Bitcoin in its foreign exchange reserves. In a statement released on December 20 under Prime Minister Ishiba Shigeru’s name, the government announced that it has no plans to add Bitcoin or any other cryptocurrencies to its reserves.

According to the statement, Japan’s decision is primarily driven by concerns over the volatility of crypto assets and a limited understanding of global trends surrounding cryptocurrency reserves. The government highlighted the purpose of foreign exchange reserves in ensuring the stability of assets and bond markets denominated in foreign currencies. It noted that crypto assets are not classified as foreign exchange assets under Japan’s regulations for special account management.

Senator Hamada, who is a member of the Party to Protect the People from NHK, had earlier urged Japan to follow the example of countries like the United States in exploring Bitcoin reserves. However, the government clarified that discussions on the matter are still in their early stages, making it difficult to express a definitive position. It added that Japan’s knowledge of international developments in this area is insufficient for informed decision-making.

The government’s statement also touches upon Japan’s legal framework for cryptocurrencies. It notes that cryptocurrencies are not classified as securities under the Financial Instruments and Exchange Act. Instead, Japan’s Payment Services Act provides the legal definition of “crypto assets.” The law mandates that any provider of cryptocurrency exchange services must register with the Financial Services Agency. Operating without proper registration is subject to criminal penalties, as outlined by Anderson Mori & Tomotsune, a prominent Japanese law firm.

This official position aligns with industry perspectives on Japan’s cautious approach to cryptocurrencies. Akihiko Ogino, CEO of a leading Japanese investment bank, has suggested that Japan should consider launching cryptocurrency exchange-traded funds (ETFs). However, Daiwa Securities, which manages the Nikkei 225 ETF, has not announced any plans for a crypto-backed ETF. Japan’s current regulatory and economic outlook on crypto assets could potentially delay the introduction of such financial products.

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