Japanese Government Rules Out Bitcoin as Reserve, Citing High Volatility

According to the document, Japan will continue to focus on traditional fiat currencies, such as the US dollar and the euro, to manage its foreign reserves.

By:Livecoins

The Japanese government has ruled out the possibility of adopting reserves in Bitcoin, clarifying its position on the matter after questions from House of Councillors member Satoshi Hamada.

The response, issued on behalf of Prime Minister Shigeru Ishiba, made it clear that the government does not consider the possibility of incorporating digital assets into its reserve strategy.

According to the document, Japan will continue to focus on traditional fiat currencies, such as the US dollar and the euro, to manage its foreign reserves.

“Bitcoin is too volatile”

The government stated that the Foreign Exchange Special Fund, regulated by Article 20 of the Foreign Exchange and Foreign Trade Control Act, is designed exclusively for transactions involving conventional foreign currencies such as the US dollar and the euro.

Including Bitcoin or other cryptocurrencies as strategic reserve assets does not align with the objectives set out in current legislation.

The government explained that while countries such as the United States explore different approaches to the use of cryptocurrencies, Japan will maintain its focus on financial stability and economic security, prioritizing traditional assets in its official reserves.

This decision shows Japan’s caution regarding the volatility and regulatory uncertainty that still surrounds the cryptocurrency market, even in the face of its growing global adoption.

While Bitcoin has established itself as a store of value in some jurisdictions, Japan has opted for a conservative approach, stressing the need for ongoing assessments before any move in this direction.