Japan’s Finance Minister Katsunobu Kato has suggested that cryptocurrencies may have a place in investment strategies, provided that the right environment is established to manage their volatility.
Speaking at an event in Tokyo, Kato acknowledged the risks of crypto’s sharp price swings but argued that, under appropriate conditions, digital assets could complement traditional holdings. He stressed that Japan must avoid overregulation that could stifle innovation, signaling that the government is seeking a balance between oversight and growth.
Rising Debt Puts Spotlight on Alternatives
The comments come as Japan faces mounting financial challenges, with its debt-to-GDP ratio now exceeding 200%. Economists warn that such conditions raise the likelihood of so-called “financial repression” policies, where governments use tools like inflation, low real interest rates, and capital restrictions to ease their debt burden.
Why Crypto Looks Attractive
If such policies take shape, traditional investments such as bonds and cash savings could see their real returns eroded. In that scenario, alternative assets — including cryptocurrencies — may appear more appealing to both institutional and retail investors looking for protection against inflationary pressures and currency depreciation.
The Bigger Picture
Kato’s remarks highlight how governments are increasingly recognizing digital assets as more than speculative tools. For Japan, which has long been a global leader in crypto regulation, the challenge lies in building an investment framework that allows growth without losing control of financial stability.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/japans-finance-chief-backs-crypto-as-part-of-investment-strategies/