“Metaplanet has adopted Bitcoin as a strategic reserve asset,” the company said in a press release issued Monday. “This move is a direct response to persistent economic pressures in Japan, particularly high levels of government debt, prolonged periods of negative real interest rates, and a correspondingly weak yen.” is the reaction.” said.

Since April, Metaplanet has purchased 117.7 BTC ($7.19 million), following the strategy followed by US-based MicroStrategy (MSTR), which has purchased billions of dollars worth of Bitcoin, according to Bitcointreasuries.net. Metaplanet, an early-stage investment firm, has moved away from all Web3-related activities and now focuses solely on exposure to Bitcoin and commercial real estate.

This move attracts attention because it took place at a time when Japan’s financial crisis was being experienced in the foreign exchange market. Crypto advocates have long hailed Bitcoin as a hedge against financial and monetary imprudence.

Japan has the highest debt/GDP ratio among developed countries. (IMF)

The ratio between Japan’s gross debt and gross domestic product (GDP) has now exceeded 254%, the highest in the developed world, according to data tracked by the International Monetary Fund. The debt/GDP ratio of the USA exceeded 123%.

Relatively higher debt prevented the Bank of Japan (BOJ) from raising interest rates simultaneously with the Federal Reserve (FED) and other major central banks. High interest rates further complicate financial problems by increasing the cost of servicing debt.

While the Fed has raised interest rates above 5% since the beginning of 2022, the benchmark borrowing cost in Japan has remained at almost zero. Therefore, the yen, one of the world’s five most important reserve currencies, has lost significant value against the US dollar. Interest rate differences significantly affect fiat currency exchange rates.

Data from charting platform TradingView shows that the Japanese yen has lost 50% of its value against the US dollar since the beginning of 2021. The yen recently broke above 155, hitting a 34-year low. In the selling wave, the BOJ reportedly sold dollars to support the yen in a classic foreign exchange market intervention.

“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. he said, adding that the BOJ’s strategy of intervening in foreign exchange markets while maintaining low interest rates was “an unsustainable monetary paradox.”

The company plans to hold Bitcoin for the long term to ensure minimal realized taxable gain and acquire more Bitcoin by issuing long-term yen debt when the opportunity arises.