Metaplanet Adopts Bitcoin as Reserve Asset Amid Japan’s Debt Burden

Bitcoin Japan Metaplanet

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Sujha Sundararajan

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Sujha Sundararajan

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May 13, 2024

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Japanese investment and consulting services company Metaplanet has adopted Bitcoin (BTC) as its strategic treasury reserve asset. The move comes at a time when Japan is facing high debt burden and a volatile national currency – yen.

Metaplanet said in a press release on Monday that the company’s strategy “unequivocally prioritizes a Bitcoin-first, Bitcoin-only approach” with financial options such as long-dated yen liabilities and periodic share issuances. This is to continuously accumulate more Bitcoin rather than retaining the ever-weaker yen, it added.

In a recent revelation, Metaplanet disclosed plans to allocate a substantial sum of ¥200 Million ($1.25 million) towards acquiring Bitcoin. On May 10, the company announced that it had purchased an additional 19.87 BTC.

*Metaplanet purchases additional 19.87 $BTC* pic.twitter.com/RripKe9mEU

— Metaplanet Inc. (@Metaplanet_JP) May 10, 2024

According to Bitcointreasuries.net, Metaplanet has acquired 117.7 BTC ($7.19 million) since April. The acquisition follows the strategy by U.S.-listed MicroStrategy (MSTR), which is known for its Bitcoin holdings.

“Metaplanet has pivoted its treasury strategy to Bitcoin, focusing on a number of complementary strategies designed to be accretive on a per-share basis in Bitcoin terms,” the release noted.

Japan’s Economic Environment Makes Metaplanet Pivot to Bitcoin

Japan’s fiscal crisis is playing a key role in its national currency’s recent slump in value. The country has been struggling with high government debt levels, prolonged periods of negative real interest rates, and the highly volatile and weak yen.

Per data by International Monetary Fund (IMF), Japan’s gross debt and gross domestic product (GDP) ratio exceeds highest 254%. In terms of the US, the debt-to-GDP ratio has increased 123%.

Further, the Bank of Japan (BOJ) implemented a negative interest rate policy since 2016 and has only recently adjusted policy rates to a range of 0-0.1% from -0.1%.

Thus, taking into the relatively high national debt and structurally low interest rates, yen has weakened significantly. The national currency has slumped by 50% against the dollar over the past decade.

“Metaplanet views bitcoin as fundamentally superior to any and all other forms of political currency, traditional stores of value and investment, and all other crypto-assets/securities,” the company added.