The Japanese government has officially responded to Senator Hamada, stating that they do not intend to adopt $BTC as part of their foreign exchange reserves due to lack of understanding and concerns about volatility.

According to a Japanese media outlet, the Japanese government released its official response to various questions posed by Senator Satoshi Hamada regarding the adoption of Bitcoin on December 20.

As part of Japan’s foreign exchange reserves. In a statement made by Prime Minister Ishiba Shigeru, it was announced that Japan does not currently intend to consider cryptocurrency reserves.

Senator Hamada, a member of the People’s Protection Party, suggested that Japan follow the example of the United States and other countries that have investigated BTC reserves. The government said that it does not have enough information on global movements in this regard and that discussions on adopting cryptocurrencies for reserves are at a very early stage. In other words, the government said that it would be “difficult to express an opinion” on the matter at this point.

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

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

Current foreign exchange reserves are intended to stabilize foreign exchange and bond markets, and the Japanese government has emphasized the volatility of crypto assets as it seeks to prioritize security and liquidity.