TL;DR: Financial Times’ chief correspondent for international finance, Henny Sender recently quoted a senior official at the Bank of Japan on the issue of cryptocurrency, admitting the country’s central bank approves of Bitcoin and even promotes it. That’s in stark contrast to most of its peers’ public comments, as regulators and state financial institutions around the world have largely condemned decentralized, permissionless digital money.

Bank of Japan Senior Official Appears Less Hostile to Bitcoin Than Peers

Sender’s recent piece in the Nikkei Asian Review is largely a meditation on the phenomenon of fiat currency devaluation, and how that could be driving savers and investors into the digital arms of bitcoin as a hedge. China is a prime example.

It’s a pet theory of most cryptocurrency enthusiasts. However, how much of it is based in reality is anyone’s guess. Anecdotes are everywhere. Upticks in speculative crypto market prices, coinciding with official central bank pronouncements or the latest in trade war news, are often seized upon as hopeful evidence.

“In the last few months the volume of purchases of bitcoin and other cryptocurrencies in China has soared: up 50%, according to one expert at the informal bitcoin association of China,” Sender wrote breathlessly, only to temper that nugget with, “although there is no way to know for sure.” But the trend of capital flight from the mainland is real, constant, and is consistently in the double-digit billions. Connecting that to bitcoin, of course, is another matter altogether and is less than compelling for most analysts.

Heartening?

Quoting a “senior official at the Bank of Japan,” the central banker explained to Sender, “Because of their fear of capital outflows, the Chinese see every financial asset as the enemy. But we don’t worry about outflows. We are in love with the technology behind it and we are in touch with the technology community. We promote bitcoin but only with controls.”

For cryptocurrency supporters, those are heartening words, reassuring to the degree they can be trusted, believed. Two facts, then, about the story can be viewed in a positive light. The obvious takeaway is one of seeming capitulation on the part of a top central bank, using the word “love” to describe decentralized financial tech, for example. Less obvious is a columnist from mainstream legacy finance news organizations is trying to synch the ideas of devaluation and cryptocurrency as being a legitimate hedge — something almost unthinkable not that long ago.

Japan is a bit of an outlier here. For whatever reason, the country’s regulators have led efforts to embrace crypto, and maybe that should be viewed positively. Japan is also a leader in cashless momentum and away from the relative anonymity paper money brings with it. Bitcoin, as most literate in the subject understand, is pseudo-anonymous at best, and mainstream media have furthered the narrative for years it is somehow fully anonymous, which can give some users a kind of false confidence. In fact, bitcoin is the exact opposite, making the surveillance of transactions much easier than traditional cash. That fact alone might force careful readers to reexamine a central banker’s praise.

DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.

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