The Japanese government has officially rejected the proposal to include Bitcoin in its national foreign exchange reserves, citing the volatility of the cryptocurrency and its incompatibility with existing financial frameworks.
This cautious stance stands in stark contrast to the growing enthusiasm for Bitcoin and other cryptocurrencies both in the private sector and among several global governments.
Government caution on Bitcoin reserves
On December 26, 2024, Japanese Prime Minister Shigeru Ishiba addressed the proposal of Senator Satoshi Hamada, a member of the House of Representatives, regarding the possibility of converting part of Japan’s foreign exchange reserves into cryptocurrencies, including Bitcoin. The Japanese government responded with a statement clarifying that cryptocurrencies are not in line with Japan’s financial reserve strategy.
Source: X
“The current legal framework does not recognize Bitcoin as part of foreign exchange reserves,” the statement said, adding that Bitcoin’s inherent volatility makes it unsuitable for the government’s strategy that prioritizes security, liquidity and stability. The government stressed that its reserves are intended to stabilize foreign currency-denominated assets and bond markets, not to accommodate speculative, risky assets like Bitcoin.
Prime Minister Ishiba also noted the lack of detailed information on the global movement towards Bitcoin reserves, particularly in countries such as the United States where discussions are still in their infancy. “It would be difficult for the government to commit to such a decision at this point,” he said.
Private sector investment in Bitcoin
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