Japanese Finance Minister Katsunobu Kato expressed openness to cryptocurrencies within diversified portfolios, provided an appropriate investment environment is established. “Crypto assets present high volatility risk but could be incorporated into diversified investments if a suitable environment is created,” stated Kato during a speech at a Tokyo event. According to Bloomberg, the Minister emphasized avoiding excessive regulations that might stifle innovation. The minister’s statements emerge amidst Japan’s escalating debt burden, surpassing 200% of GDP. This trend has sparked concerns about potential financial repression measures, aiming to reduce government debt through inflation, low or negative interest rates, currency depreciation, and capital controls. Experts suggest these measures could erode returns on fixed-income investments while making alternative assets like cryptocurrencies more appealing.
*This is not investment advice.*