Japan’s Metaplanet Adopts Bitcoin as Treasury Reserve Asset

Metaplanet Inc., a Tokyo-listed crypto investment and consulting firm, on Monday said that it has adopted bitcoin as its strategic treasury reserve asset in response to the persistent economic adversity in Japan.

Recognising both the challenges and opportunities within the current global financial landscape, Metaplanet has adopted bitcoin as its strategic treasury reserve asset.

“The move is a direct response to sustained economic pressures in Japan, notably high government debt levels, prolonged periods of negative real interest rates, and the consequently weak yen,” the company said.

Metaplanet’s strategy prioritised a Bitcoin-first, Bitcoin-only approach for the company, with the potential use of long-dated yen liabilities and periodic share issuances as strategic financial options to continually accumulate more bitcoin instead of retaining the ever-weaker yen. This approach is designed to be accretive on a bitcoin per share basis, underpinning shareholder value on a long term basis.

According to Metaplanet, Japan’s economic environment is overshadowed by the highest government debt-to-GDP ratio in the developed world, currently standing at 261%.

This condition has necessitated a prolonged phase of monetary easing, which includes debasement of the national currency to manage existing and future debt burdens. Furthermore, the Bank of Japan (BoJ) had implemented a negative interest rate policy since 2016, only recently adjusting policy rates to a range of 0-0.1% from -0.1%, the company said.

As a result of the crippling relative size of the national debt and structurally low interest rates, the Japanese yen has weakened significantly, depreciating by 50% against the dollar over the past decade. This weakness is evident to all market participants, and is only temporarily masked by sporadic interventions from the BoJ in both the government bond and foreign exchange markets.

The two-pronged policy of the BoJ, which has involved printing yen to purchase government bonds, thereby artificially suppressing borrowing costs, while simultaneously intervening in the foreign exchange market to curb the yen’s depreciation triggered by this very money printing, represents a double-bind and unsustainable monetary paradox.

“These very actions reveal the unsustainable nature of Japan’s financial trajectory, with the demographic picture aligning to all but ensure that an increasing rate of monetary debasement is in Japan’s future,” the company said.

The precarious state of the yen was thrust front and centre for the world to see at the end of this April, with the yen plummeting to 34 year lows against the dollar, before recovering on the backs of an unprecedented one-day currency market intervention from the Bank of Japan estimated to have been around $35 billion.

In response to these challenges, Metaplanet has pivoted its treasury strategy to bitcoin (BTC), focusing on a number of complementary strategies designed to be accretive on a per-share basis in bitcoin terms.

This strategic decision is driven by both the need to mitigate the yen currency risks associated with Japan’s fiscal policies, as well as the opportunity to capitalize on the continued monetization process of bitcoin as it steadily entrenches itself across the balance sheets of the world.

Bitcoin First, Bitcoin Only                                             

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. Bitcoin is an absolutely scarce digital synthetic monetary commodity, with no central issuer.

Bitcoin’s monetary policy is rigidly set in stone through 2140, setting it apart from both monetary metals and competing crypto projects operated at the whims of centralised developer teams.

It also positions Metaplanet as a Bitcoin-focused investment vehicle globally. The strategy not only leverages a Bitcoin-centric approach, but also harnesses Japan’s unmatched global capital cost advantage, amplifying the Company’s competitive edge internationally.

By aligning treasury management with these forward-looking strategies, Metaplanet is constantly enhancing shareholder value while maintaining a unique market position in not just Japan but also in the rapidly shifting global economy.