Japanese Minister of Finance, Katsunobu Kato, said on Monday that cryptocurrencies can be part of a diversified portfolio.
“Cryptographic assets present risks surrounding great volatility, but by creating an appropriate investment environment, they could be part of diverse investments,” Kato said at an event in Tokyo, according to Bloomberg.
The Minister added that the government has tried to ensure that innovation is not stifled by excessive regulations.
Kato’s comments are particularly notable in the context of the debt ratio to Japan GDP greater than 200%, which raises concerns about imminent financial repression and the potential depreciation of the Yen.
Financial repression involves policies aimed at reducing public debt charges through measures such as inflation, low or negative real interest rates, depreciation of currencies and capital controls.
These policies tend to erode yields on traditional fixed income securities and cash, thus strengthening the attraction of alternative investments, such as cryptocurrencies, which offer real yields and diversification.
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