How Cryptocurrencies Undermined the Yen — and Which AI Agent Russia Needs to Launch Globally Immediately

Somehow, the news that the yen had fallen to a 40-year low against the dollar went almost unnoticed. Well, it fell — so what? Especially since the explanation is always the same.

They say the Bank of Japan's rate is 1%, while the US Federal Reserve's is 3.5–3.75%, leading to the conclusion that global investors borrow in yen, sell them, convert to dollars, and invest in dollar assets — stocks and bonds on Wall Street.

This is called a carry trade. And since the yen is being sold off, it keeps sliding.

But it's not that simple. By the way, I looked at what various neural networks write about the yen — all say the same thing, which is easy to understand: they copy whatever analytics they find.

But in reality, the situation is different. High rates don't always prompt investors to rush to borrow cheaper and then invest. And it's not just about the risks of loss — it's more about the absence of a desire to maximize profits at any cost.

In my line of work, I interact a lot with ultra-wealthy investors, whose capital sometimes exceeds $1 billion. A strategic approach to portfolio management is what they value most.

So capital didn't flee Japan because of the rate differential — and certainly not to the US. As I see it, the outflow went mostly to Hong Kong and Singapore. Why and how? It's all about cryptocurrencies.

In June, their turnover on exchanges within Japan jumped 27.7% compared to May, and in August, the Financial Services Agency expanded its cryptocurrency monitoring department.

This information is nowhere to be found in Japanese media, or elsewhere, but the reality is that Tokyo is deeply concerned about the volume of capital leaving the country via cryptocurrencies.

Here's what's happening. Japanese authorities created a regulatory framework, brought the market into the white zone, and gradually decided to move away from a progressive taxation scale on cryptocurrency turnover — where rates reach 55% — to a flat 20% rate.

The logic is clear: compliance (i.e., identification of transaction participants) will help ensure that turnover is not used for illegal purposes. Additionally, taxes can be collected for the budget.

Everything seems clear, but unfortunately, cryptocurrencies are a channel for cross-border capital movement that Tokyo cannot control.

Incidentally, the Central Bank of Russia presented an interesting consultative report at the end of June. It states: "Russian legislation does not provide for the concept of 'stablecoin,' but allows the issuance of digital financial assets with stablecoin characteristics. They can be viewed both as an investment object and as a tool for international settlements, but cannot be used for domestic settlements. In practice, such DFAs have not yet been issued." At the same time, the report notes that when it comes to the global stablecoin market, settlements between two companies from different countries in such financial instruments "can take place almost instantly, unlike bank transfers through multiple SWIFT intermediaries, which can take more than 5 days."

In fact, the existence of such instruments is a major headache for regulators worldwide. How to ensure 100% compliance coverage of all cross-border transactions? Theoretically, it's clear how: create regular rules. But in practice, fully implementing this doesn't always work.

This is exactly what's happening with Japan. Large capital is leaving the country. And not to the US — there's its own warning sign there. Trump plans to introduce an inflation deduction on capital gains tax for the first time in American history.

Previously, it worked like this: if shares were bought for, say, $2,000 and sold for $5,000, tax was levied on the difference ($3,000). Now, US authorities intend to account for inflation — that is, to deduct the decline in the dollar's purchasing power over the period between purchase and sale.

One might ask — what happened that this is being done for the first time? It's simple: inflation has become too high (not by statistics, but in reality) to ignore it, as could be done for decades.

In such a situation, and for a number of other factors (for example, the outflow from US Treasury bonds was so large in August that the placement of new 10-year issues went at the highest rates since 2007), there is no point in moving capital from Japan to the US. But these are nuances. The main thing is: the yen is falling now because money is leaving Japan through cryptocurrencies (stablecoins).

The lesson for the world should now be very important: theoretically, almost any currency in the world could find itself in the yen's position. The question is not even why a large capital outflow might occur, but the availability of digital tools for it, which the whole world is trying to bring into the regulatory field but cannot 100% succeed.

What to do? I believe that states need to play more actively on this field — in the interests of protecting their own financial systems. It's important to note that when it comes to capital flight from Japan, it's not about millions of small-sum holders, but about a circle of people with very large wealth.

That is, for the regulator there, it's important to understand: how to control large capital flows.

I believe that the best solution in such a situation is to ensure the popularity of those digital instruments to which compliance is easily attached. That is, to develop the central bank digital currency.

Incidentally, Russia has such a currency — the digital ruble. By and large, the global digital currency field is currently a free competitive space. If you enter it, you can play big.

In Russia's case, we know: almost three-quarters of exports and half of imports are paid for in rubles. What's missing is for prices on goods — especially exports — to be formed in the Russian national currency, rather than recalculated through dollar benchmarks in New York and London.

If the digital ruble ecosystem is promoted to the global level, it will be possible to achieve the emergence of ruble-denominated price benchmarks that are in demand worldwide, and also finally resolve the issue of cryptocurrency regulation. Because global experience shows: it's very difficult to achieve full transparency in this area, given that any country deals with both an internal circuit and an external one, and in the latter case, the country's jurisdiction encounters the laws of other states.

And we shouldn't forget about AI here either. AI agents are increasingly giving advice to investors of all levels. If these neural network assistants are trained on data that repeats the postulates of classical US finance textbooks about the risk-free nature of US government debt, etc., then capital will be advised to park there as well.

Hence the obvious conclusion: in addition to its own digital currency, Russia needs to focus on creating a narrowly focused AI agent oriented toward the needs and demands of large-capital holders worldwide. We have everything on which it can be trained, as forming investment portfolios and achieving acceptable returns for large money has been possible under any circumstances. Such a dataset is currently the most valuable thing in the AI field — more valuable than any semiconductors, rare earth metals, or anything else.

Let me say it straight: global capital, wherever it is, thinks in the same parameters — liquidity, accessibility of funds, and comfort in managing capital.

Now is the time to seriously start thinking about how to offer the world a digital ecosystem for managing large money that would be most attractive to investors. This would allow large investments to flow into Russia and ensure their functioning through smart contracts. The demand for this is enormous, and given what Japan is going through now, action in this direction is needed immediately.