Japan and Russia Dismiss National Bitcoin Reserve Plans ‘At This Time’

The authorities in Japan and Russia have dismissed the idea of establishing national Bitcoin (BTC) reserves in the immediate future.

Both nations expressed a preference to observe how other countries, particularly the USA, manage Bitcoin reserves before making any decisions.

In Japan, the government responded to an inquiry from a lawmaker who proposed that the state should start accumulating BTC.

Meanwhile, in Moscow, the Finance Minister indicated that Russia would be “better off keeping” its “powder dry.”

Japanese Prime Minister Shigeru Ishiba (left), Russian Finance Minister Anton Siluanov (right); (Sources: Ogiyoshisan ;Kremlin.ru [CC BY-SA 3.0; CC BY 4.0]

Japan, Russia: No Bitcoin Reserve Plans

On December 11, Japanese lawmaker Satoshi Hamada sought the government’s perspective on his assertion that “Japan should follow the example of the United States and other countries.”

Hamada encouraged Tokyo to “consider converting a portion of its foreign exchange reserves into cryptocurrencies like Bitcoin.”

In a statement released on the Japanese House of Councillors’ website, Prime Minister Shigeru Ishiba’s office noted that it does not yet “have a detailed understanding of developments in the United States and other countries.”

Ishiba’s office remarked that initiatives to establish a national Bitcoin reserve in the US and elsewhere were “still in their early stages.”

Consequently, the PM’s team stated, it remains “difficult for the government to express a view” on the subject.

Inflation in Japan’s capital accelerates, keeps rate hike prospects intact https://t.co/kPji7EHgz9 pic.twitter.com/cbDtZk2VdW

— Reuters (@Reuters) December 27, 2024

Lack of Legal Framework

The written response also highlighted that Japanese law currently prohibits Tokyo from holding cryptocurrency.

Additionally, the PM’s team indicated that existing foreign currency reserves are solely “intended to stabilize Japan’s foreign currency-denominated assets and foreign currency bond markets.”

The government further stated that the “volatility of cryptoassets, including Bitcoin,” rendered them “incompatible with the current system.”

The Japanese media outlet CoinPost reported that the “official response from Prime Minister Ishiba” once again “demonstrates that the Japanese government is maintaining a cautious stance” on cryptocurrency.

Ishiba has made a series of non-committal remarks regarding crypto adoption in recent weeks, including conservative comments on potential crypto tax reforms and Bitcoin spot ETF approval.

The outlet noted that Ishiba’s statements come “amid ongoing discussions both at home and abroad about using crypto as a national reserve asset.”

No Russian BTC Reserve?

In the meantime, Russia’s RBC reported that Finance Minister Anton Siluanov informed a student audience at the state-run Financial University that “the issue of creating a cryptocurrency reserve could be considered in the future,” but emphasized that the topic is not currently under discussion.

Russia faces increasing difficulty shipping commodities to China through its vast eastern rail network, a sign of the growing economic challenges stemming from war and sanctions, despite the Kremlin’s assurances that all is well. https://t.co/4RSNQbgh0G

— Bloomberg Markets (@markets) December 23, 2024

Siluanov mentioned that the matter could be revisited at a later date, after Moscow “assesses what happens over the next five to 10 years.”

“It is of course easy to [say]: If you had invested money in Bitcoin at the beginning of the year, you would have earned twice or even three times your money back. However, there is also a risk of loss. So the state does not take those kinds of financial risks. Not at all. It is better to earn less, but keep – as they say – your powder dry,”

Russian Finance Minister Anton Siluanov

Siluanov added that despite the significant increase in BTC prices this year, “cryptocurrencies are less predictable today than other assets.” However, he remarked:

“Maybe someday, we will come around to the idea of [building a national Bitcoin reserve]. The Americans are talking about this now. They are talking about using crypto as a national reserve asset. But since crypto is a very volatile instrument, investing a sovereign state’s funds in something so [unpredictable] is probably dangerous.”

Trump Ready to Act

US President-elect Donald Trump has mentioned the possibility of establishing a state-operated BTC reserve on several occasions.

‘Crazy worked just fine the first time’: Why some Republicans see Trump’s imperialist musings as an act of negotiation. https://t.co/WXlPZ4eDle

— POLITICO (@politico) December 26, 2024

American lawmakers have already laid the groundwork for this, drafting a bill that would establish the legal framework for such an initiative.

VanEck analysts have suggested that the US could potentially reduce its debt by 35% by 2049 if Washington begins purchasing Bitcoin.

Other countries are also investigating their BTC acquisition options, with Brazilian officials particularly interested.

Lawmakers in various parts of the world, including both Japan and Russia, have also urged their governments to act swiftly to remain competitive with Washington.

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