Japan finance minister Katsunobu Kato said on Monday that cryptocurrencies can be part of a diversified portfolio.
“Cryptographic assets have risks around high volatility, but through the construction of an appropriate investment environment, they could be part of diversified investments,” Kato said while talking in an event in Tokyo, according to Bloomberg.
The minister added that the government has been trying to ensure that innovation does not feel suffocated by excessive regulation.
Kato’s comments are particularly notable in the context of the Japan Debt / GDP ratio of more than 200%, which raises concerns about the imminent financial repression and the potential depreciation of YEN.
Financial repression implies policies aimed at reducing government debt loads through measures such as inflation, low or negative interest rates, monetary depreciation and capital controls.
These policies tend to erode the yields of traditional fixed and effective income holdings, which increases the attractiveness of alternative investments, such as cryptocurrencies, which offer real yields and diversification.
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