Japanese Government Skeptical of Bitcoin Reserve

The Japanese government is reportedly not ready to embrace the idea of adopting Bitcoin as a reserve currency.

Satoshi Hamada, a serving member of the House of Councillors, recently urged the Japanese government to follow the U.S. lead by buying Bitcoin with a portion of foreign exchange reserves.

However, Prime Minister Shigeru Ishiba has clarified that the government doesn’t actually have any detailed knowledge of such moves by the U.S. government.

At this stage, the Japanese government is not ready to provide a definitive answer regarding its readiness to consider adopting Bitcoin as a treasury reserve currency.

The government also clarified that it was focused on ensuring the safety and liquidity of foreign exchange reserves. 

Bitcoin, despite making substantial progress in terms of institutional adoption, remains a relative volatile asset. 

The idea of the U.S. government creating a Bitcoin reserve gained significant traction earlier this year because of a bill introduced by Senator Cynthia Lummis of Wyoming. 

Some pundits of the likes of Fundstrat’s Tom Lee believe that the creation of a Bitcoin reserve could help the government offset the debt. 

Michael Saylor of MicroStrategy has also argued that the reserve could be beneficial from a geopolitical perspective if the U.S. government chooses to sell gold in favor of Bitcoin, thus demonetizing the latter. 

Earlier this year, SkyBridge Capital founder Anthony Scarammuci predicted that the US creating a Bitcoin reserve would force other central banks to do the same. 

However, there's also a lot of critics of this idea. “A Bitcoin Strategic Reserve is a transfer of wealth from the U.S. government to holders of BTC. These are the priorities of profiteers, not entrepreneurs,” Miles Jennings of a16 Crypto said.