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The Japanese federal government expresses caution about incorporating Bitcoin or any other crypto asset into its foreign currency reserves.
The government recently stated this position while responding to a query from Satoshi Hamada, a member of Japan’s House of Councilors. In a recent letter, Senator Hamada quizzed Japan’s federal government about the United States’ plan to establish a strategic Bitcoin reserve.
The senator urged the government to consider following the United States and other countries in adopting Bitcoin as part of its foreign currency reserves.
Japanese Government Cautious About Creating National Bitcoin Stockpile
Responding to the query in a letter seen by local media outlet CoinPost, the government emphasized that it does not sufficiently understand the U.S. Bitcoin reserve plans.
Additionally, it stated that cryptocurrencies, like Bitcoin, cannot be categorized as foreign exchange based on legal frameworks for special accounting operations.
According to the government, the current reserves are strategically positioned to stabilize foreign currency-denominated assets and foreign currency bond markets.
Furthermore, the government expressed concerns about the volatility associated with cryptocurrencies, which is inconsistent with the current system’s priority for the security of the foreign reserve.
Bitcoin Reserve Discussions Spike
Discussions about Bitcoin reserves have been gaining momentum in recent times. This comes after U.S. President-elect Donald Trump revealed that his administration will establish a strategic Bitcoin reserve, which could be used to pay off the country’s debt.
Interestingly, Trump’s plan to set up a Bitcoin reserve prompted pro-Bitcoin Senator Cynthia Lummis to propose a Bitcoin Act Bill that requires the country to purchase 1 million BTC over the next five years.
The bill proposes purchasing 200,000 BTC yearly, bringing the total to 1 million in five years. According to the proposal, the Secretary of State will hold the 1 million Bitcoin for 20 years without selling it.
Since the bill’s introduction, several U.S. states, such as Pennsylvania, Ohio, and Texas, have indicated interest in launching their own Bitcoin stockpiles.
Despite the growing debate about creating Bitcoin reserves internationally, Japan is not interested in pursuing such a measure.