Tokyo-listed Metaplanet has chosen bitcoin as its strategic reserve asset to protect against Japan's public debt burden and the yen's decline.
“According to a press announcement on Monday, Metaplanet has chosen bitcoin as its strategic reserve asset. The move is a direct response to sustained economic pressures in Japan, in particular high levels of public debt, long periods of negative real interest rates and the consequent weak yen,” the company said.
Since April, Metaplanet has purchased 117.7 BTC ($7.19 million), following a strategy implemented by US-listed MicroStrategy (MSTR), which has purchased billions of dollars in bitcoin, according to Bitcointreasuries.net.
Metaplanet does not have any involvement with Web3 and is currently focused solely on bitcoin with exposure to commercial real estate.
The move stands out because it comes at a time when Japan's financial crisis is said to be playing out in the currency markets. Cryptocurrency advocates have long touted bitcoin as a defense against fiscal and monetary irresponsibility.
Japan's ratio between public debt and GDP currently exceeds 254%, the highest among developed economies, according to International Monetary Fund data. The US debt/GDP ratio has exceeded 123%.
Japan has the highest debt-to-GDP ratio among advanced countries | Source IMF
Relatively high debt levels have kept the Bank of Japan (BOJ) from raising interest rates along with the Federal Reserve (Fed) and other major central banks. Higher interest rates increase the cost of debt, further complicating financial matters.
While the Fed has raised interest rates above 5% since the beginning of 2022, the reference cost of borrowing in Japan remains almost zero. As a result, the yen, one of the five global reserve currencies, has fallen strong price. The interest rate differential strongly affects the exchange rate of the local currency.
Data from charting platform TradingView shows that the Japanese yen has depreciated by 50% against the US dollar since the start of 2021. The yen recently retreated below 160 per US dollar, reaching a 34-year low. year.
“As the yen continues to weaken, bitcoin provides a non-sovereign store of value, and could continue to appreciate against traditional fiat currencies,” Metaplanet added, stating that its strategy The BOJ keeping interest rates low while intervening in the foreign exchange market represents an “unsustainable currency paradox.”
The company intends to hold bitcoin for the long term to ensure minimal tax unrealized profits and purchase more bitcoin by issuing long-dated yen debt when the opportunity arises.
Source: https://tapchibitcoin.io/metaplanet-bien-bitcoin-thanh-tai-san-du-tru-khi-nui-no-cua-nhat-ban-ngay-cang-tang.html