U.S. Treasury Secretary urges Japan to raise interest rates, highlighting bitcoin’s fixed monetary policy
U.S. Treasury Secretary Scott Bessent has encouraged Japan to raise interest rates to support the yen, according to a report by Japanese broadcaster NHK. The move highlights how traditional financial systems allow external influence over monetary policy, unlike bitcoin.
Bitcoin, the largest cryptocurrency, operates on a fixed monetary policy written into its code. New coins are released on a set schedule, and the rate of new supply is halved roughly every four years. This predictability is a key reason supporters argue it is a reliable store of value.
However, the article notes that bitcoin’s price can still be affected by broader market shifts. For example, when Japan raised rates in August 2024, the yen strengthened, leading to a wave of risk aversion that temporarily hurt bitcoin’s price.
Why bitcoin’s design differs from traditional currency
Unlike government-issued money, bitcoin’s supply rules cannot be changed by external pressure or policy decisions. Its code enforces a strict limit on how many new coins are created and when, making its monetary policy resistant to outside influence.
Market impact of rate changes
If Japan raises rates, the yen could rise quickly, unwinding bets made with cheap yen funding in assets like stocks, bonds, and cryptocurrencies. This could trigger sales in risk assets, including bitcoin, as investors adjust their positions.
