Americans Enjoy Spending Their Dollars While Japanese Grip Yen Tightly

The following is a contributed article from a content partner of Benzinga

One thing that we learned from a recent bitflyer study and other glances into the Japanese investor’s mindset is that the Land of the Rising Sun is not a place where cryptocurrency is abundantly popular for savers

Unlike in countries where market volatility pushes traders into the cryptocurrency market, the Japanese tend to hold onto their fiat currency, keeping savings in the form of the Yen instead of trying desperately to get it into other assets that will yield gains to beat inflation or hedge other risky bets.

Why this predilection for their own national currency over other types of assets, especially when these investment assets are so abundant in new frictionless global markets?

Japanese Banking and Currency Considerations

Japan has a stable banking system. The Yen is a strong currency.

Both of these statements are supported by a lot of documented reporting over the years that you can easily find all over the Internet. A strong Yen means that even foreigners tend to hold this national currency in times of trouble, and the stable banking system doesn't create the fear and concern that pushes people's money into higher-risk investments. By contrast, legions of American financial investors continue to push the gospel that unless citizens put their savings into  401k and IRA investments that are tax-shielded or tax-deferred, and get gains equal to the S&P, they won’t have enough saved for retirement. This tends to have the average American looking for some get-rich-quick equities.

Japanese Culture

Another pillar of the Japanese investment sentiment that leads them to favor fiat currencies over crypto is that the Japanese are traditionally risk-averse.

Etymological studies show that the Japanese perception of the word “risk” is profoundly negative. This has its own ramifications for the investment culture, where the bitflyer study showed that only some 22% of Japanese investors have a positive view of cryptocurrency, and only 31% of them have any financial asset investments at all. This may seem strange in nations where consumers mostly follow the edict to invest their money with professionals who then put it into the market in some elaborate way, shape or form.

Regional Cryptocurrency Markets

It's also instructive to look at Japan in terms of its relation to its neighbors. In China, private parties are responsible for the majority of Bitcoin mining, but the government of the middle kingdom is trying to create a digital yuan central-bank cryptocurrency to rival decentralized coins.

Smaller markets like Korea and Singapore, meanwhile, are on the forefront of cryptocurrency adoption and functionality.

By contrast, Japan seems to be a place where people are happy with traditional banking and less likely to put their money into newfangled crypto investments. This stolid financial tendency is notable in a world where investment is such a brass ring type of pursuit in many other cultures. Eventually, BTC proponents say, Bitcoin and other crypto will be foundational to systems around the world. But these systems may come to Japan last.