Yen Backed by Hostages of the Economy?

Koji Higashi, a prominent Japanese cryptocurrency entrepreneur, has addressed the scepticism among some Japanese individuals who view Bitcoin as a currency "not backed by anything of value.”

He contends that this perspective overlooks the reality of the Japanese yen, which he provocatively claims is "backed by hostages.”

Higashi argues that the Japanese currency is essentially supported by individuals he describes as being held hostage by the economy.

As the executive of the Diamond Hands Lightning Network, he notes that a significant portion of the Japanese public shares the belief that Bitcoin lacks intrinsic backing.

However, he challenges this viewpoint with a provocative question:

“What about the backing of the Japanese yen?”

He emphasizes that many fail to recognise that fiat currency relies on the diligence of citizens who, despite facing economic hardships, continue to work hard, pay taxes, and save their money in yen without complaint.

This comparison invites a deeper examination of the underlying values and structures that support different forms of currency.

Quality of Life on a Downward Spiral

Higashi's perspective highlights the ongoing challenges facing Japanese society, particularly the decline in quality of life over the past decade.

He points out that retirees are struggling with insufficient pensions that fail to cover their daily expenses, while many workers grapple with stagnant wages amid a weakening currency and rising inflation.

Furthermore, he notes that a significant number of Japanese citizens have fallen victim to a pervasive tax burden exacerbated by an expanding bureaucracy.

Higashi suggests that this situation is prompting more people to voice their concerns and demand change.

Is Crypto Being Politically Hijacked?

Higashi's comments have sparked a contentious debate regarding the potential political co-opting of cryptocurrencies, with some analysts suggesting that his remarks have opened a "can of worms" on the topic of state and corporate influence over popular digital currencies.

Bitcoin advocate Roger Ver has previously stated in his writings that the original Bitcoin has been "co-opted by powerful and vested interests."

Market observers are now questioning whether the recent surge in Bitcoin prices is primarily driven by speculative hype and the prevailing US dollar-dominated fiat system, a point also raised by Higashi.

For instance, fellow Bitcoin supporter David Shattuck has claimed that the stablecoin Tether is "unredeemable," suggesting that companies like MicroStrategy can indefinitely leverage it.

While some proponents of stablecoins argue that Tether is indeed "redeemable," the reality remains that Tether is predominantly denominated in US dollars, raising concerns about its stability and long-term viability.

Polarising Statement or Uncomfortable truth?

The essence of Higashi's critique lies in the notion of financial dependence.

Fiat currencies, such as the yen, are underpinned by government policies, taxation, and public trust in institutional stability.

However, this reliance can also tether citizens to economic decisions over which they have little influence.

Japan's aging population, stagnant wage growth, and deflationary pressures further accentuate these vulnerabilities, making individuals increasingly reliant on government interventions to sustain economic equilibrium.

Bitcoin, in contrast, represents a paradigm shift toward decentralised finance (DeFi).

With no central authority or political agenda dictating its value, Bitcoin empowers users to engage in peer-to-peer transactions, free from traditional monetary policies.

This autonomy aligns with the growing demand for financial sovereignty, particularly in regions where economic mismanagement has eroded trust in fiat systems.

Higashi’s remarks also touch on a broader debate: the political underpinnings of currency.

Governments use fiat money as a tool to implement fiscal and monetary policies, often sacrificing individual financial freedom for broader economic goals.

Cryptocurrencies challenge this dynamic by prioritising transparency, decentralisation, and individual agency.

In a world where economic landscapes are rapidly evolving, Higashi’s observations remind us of the need to critically examine the systems we rely on.

His metaphor of "hostages" underscores the importance of exploring alternative financial models that prioritise autonomy and fairness.