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Tokyo-listed Metaplanet has adopted bitcoin (BTC) as a strategic reserve asset. This move is a hedge against the mounting debt burden of Japan and the associated volatility of the Japanese yen, according to Metaplanet.
Japan's Deepening Economic Crisis
Japan is currently facing severe economic challenges, highlighted by an unprecedented government debt-to-GDP ratio. According to the International Monetary Fund, this ratio stands at 254.6%, the highest among developed nations.
This immense debt load has contributed significantly to the yen's instability, which plummeted to a 34-year low last month, despite governmental attempts to stabilize the currency through an interest rate hike in March.
The Japanese yen has rapidly declined, depreciating by 50% against the U.S. dollar since the start of 2021.
In response, the Bank of Japan undertook a sizable dollar-selling intervention to support the yen, although the currency continues to struggle under the weight of Japan's fiscal policies.
Bitcoin as a Hedge
Metaplanet has articulated that Bitcoin provides a "non-sovereign store of value," which is increasingly appealing as fiat currencies face depreciation.
“As the yen continues to weaken, Bitcoin offers a non-sovereign store of value that has, and may continue, to appreciate against traditional fiat currencies,” Metaplanet said in a press release.
The company pointed out Bitcoin’s fixed monetary policy, set until 2140, as a stark contrast to the more fluid policies governing traditional currencies and other cryptocurrencies. This rigidity provides a predictability that is highly valued in turbulent economic times.
Since April, Metaplanet has strategically acquired 117.7 BTC, valued at $7.19 million. This acquisition strategy follows the example set by MicroStrategy, a U.S.-listed firm that has invested billions in Bitcoin.