Japan’s Finance Minister Katsunobu Kato said on Monday that Cryptocurrencies can be part of a diversified portfolio.
“Crypto assets have risks about high volatility, but by building an appropriate investment environment they could be part of diversified investments,” Kato said while talking at an event in Tokyo, according to Bloomberg.
The minister added that the government has tried to ensure that innovation is not suffocated by excessive regulation.
Kato’s comments are particularly remarkable in the context of Japan’s debt-to-BNP ratio that exceeds 200%, raising concerns about impending financial oppression and potential depreciation of yen.
Economic oppression involves policies aimed at reducing government debt burdens through measures such as inflation, low or negative real interest, currency control and capital control.
These policies tend to erode returns on traditional fixed-income and cash holdings, thereby increasing the appeal to alternative investments, such as cryptocurrencies that offer real returns and diversification.
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