With the growing adoption, prices, and volume of cryptocurrencies, several giant investors including the nation have started to explore the potential of these digital assets.
In a most recent development, the government of Japan is cautious that holding Bitcoin as a national reserve might be a bare move, due to volatility and legal incompatibility.
The official release in the name of Prime Minister Shigeru Ishiba clarified the queries from NHK Protection Party’s member Senator Satoshi Hamada.
Citing comparable conversations in the US and other nations, Hamada has asked the government to take into account turning a portion of Japan’s foreign exchange reserves into cryptocurrencies.
According to the response, worldwide talks on adding Bitcoin to reserves are still in their infancy, and Japan lacks a thorough grasp of such activities outside.
Further quoting that ” It would be difficult for the government to express a view on the specific situation.”
The government’s statement reiterated that cryptocurrency assets, such as Bitcoin, do not currently qualify as foreign exchange under existing laws and that Japan’s reserves are intended to support bond markets and assets denominated in foreign currencies.
Officials reaffirmed that the extreme volatility of cryptocurrencies is incompatible with Japan’s reserve policy, emphasizing safety and liquidity.
Will Crypto continue to flourish in Japan in the coming future?
Japan is globally known for its innovations, yet the stance of the government over cryptocurrencies remains unclear, and as of now the nation has no clear plan to acquire Bitcoin.
As per the available information, Japan became one of the first nations to legally recognize crypto assets as digital payment under the Payment Services Act (PSA).
Debate has centered on Japan’s cryptocurrency tax policy, particularly in light of recent talks spearheaded by the government of Prime Minister Shigeru Ishiba. Significant tax revisions are part of the planned economic stimulus package, which is anticipated to be approved by the end of 2024.
Japan has likewise adopted a progressive stance on stablecoin regulation, emphasizing consumer protection and innovation. The nation has established a robust regulatory framework by limiting the issuing of stablecoins to financial institutions that hold licenses.
Japan is working with international organizations to standardize cryptocurrency laws in an effort to create uniform worldwide standards and enable smooth cross-border transactions.
By 2025, there will be 19.43 million cryptocurrency users in Japan, and the industry is projected to grow to $1.3 billion. With more than $9 billion in sales, the US market leads the world in cryptocurrency revenue.
Bitcoin is not the most traded cryptocurrency in Japan, which is an astounding truth. With over 837.1 million units exchanged, XRP is the most popular cryptocurrency. Oasys, Astar, Dogecoin, Avalanche, Solana, and Ethereum are next in line.
9.9% of the 6,868 documented incidents of investment fraud, which resulted in losses of around ¥64.14 billion ($424.97 million), were connected to cryptocurrencies.
Meanwhile, romantic scams reported 4,639 incidents, resulting in ¥23.65 billion ($156.7 million) in financial damages, 17.7% of which involved transactions utilizing cryptocurrency.
