Japan’s Finance Minister Endorses Crypto for Investment Diversification

Japan’s Finance Minister Katsunobu Kato is urging the creation of a friendlier environment for digital ￰0￱ believes cryptocurrencies can play a role in diversified portfolios if safeguards are in ￰1￱ at the WebX2025 digital assets forum in Tokyo, Kato expanded on this ￰2￱ acknowledged the risks linked to digital currencies, including extreme volatility. However, he argued that these risks can be controlled if the right investment frameworks are introduced. “Cryptocurrencies could be part of diversified investments,” Kato ￰3￱ added that clear rules and a supportive ecosystem would help investors adopt them with greater ￰4￱ also warned against excessive restrictions that could block innovation and discourage ￰5￱ to Kato, the ministry’s goal is to design a framework balancing safety, innovation, and global ￰6￱ Burden Adds Urgency to Alternative InvestmentsKato’s remarks came at a time when Japan is dealing with a debt-to-GDP ratio surpassing 200%.

This is one of the highest levels among developed ￰7￱ fear that the burden could trigger financial repression, where governments manage debt using inflation, low interest rates, or currency ￰8￱ conditions hurt returns on traditional safe assets such as government bonds and savings ￰9￱ many investors, this strengthens the case for alternative holdings such as cryptocurrencies, which provide potential real returns and portfolio ￰10￱ Push: Japan Approves Yen-Backed StablecoinJapan has also made progress on ￰11￱ Financial Services Agency (FSA) recently approved the issuance of the first yen-denominated ￰12￱ coin, issued through Tokyo-based fintech JPYC, is expected to play a significant role in the domestic and international ￰13￱ say yen-backed stablecoins can simplify cross-border settlements and attract institutional investors.

Additionally, they can enhance liquidity for government bonds by serving as reliable collateral. “Yen stablecoins can boost efficiency and build trust among institutions,” said Jamie Elkaleh, CMO at Bitget ￰14￱ and Policy Reforms Under ReviewJapan’s crypto investors currently face heavy taxation, with realized gains taxed at a maximum rate of 55%. Policymakers are now considering major reforms, including a separate taxation bracket that would lower the rate to 20%, aligning it closer with equity investments. Meanwhile, the ruling Liberal Democratic Party (LDP) has proposed reforms to prevent insider trading in digital ￰15￱ measures would apply rules similar to those in the stock market, ensuring that malicious actors cannot profit from confidential ￰16￱ reforms are seen as crucial steps toward making Japan’s crypto market safer, fairer, and more attractive to both local and international ￰17￱ Leaders Converge at WebX2025The WebX2025 forum, held on August 25–26 in Tokyo, highlighted Japan’s growing importance in the global digital assets ￰18￱ event confirmed the presence of Prime Minister Shigeru Ishiba, Finance Minister Katsunobu Kato, and Tokyo’s Governor, along with many influential figures from the global crypto ￰19￱ industry leaders such as Changpeng “CZ” Zhao of Binance, Justin Sun of Tron, Galaxy Digital’s Mike Novogratz, and Arthur Hayes of Maelstrom were also in ￰20￱ Interest: Trump-Linked Crypto ExpansionInternational business interest in Japan’s crypto market is also ￰21￱ to recent reports, Eric Trump is expected to attend the Metaplanet Shareholder Meeting in Tokyo next month, where new capital-raising options will be ￰22￱ addition, American Bitcoin, a company backed by Eric Trump and Donald Trump Jr., has announced expansion plans in Japan and Hong ￰23￱ experts say the move signals growing foreign confidence in Japan’s evolving digital asset framework.

Japan’s approach to digital assets reflects both caution and ￰24￱ advancing reforms while fostering innovation, the country is building a stronger framework for a more resilient and globally competitive cryptocurrency market.