Arthur Hayes Says Fed FIMA Yen Strategy Could Boost Bitcoin, Gold and Ethereum

BitMEX co-founder Arthur Hayes said Japan could support the yen by tapping the Federal Reserve’s Foreign and International Monetary Authorities, or FIMA, repo facility rather than relying on aggressive Bank of Japan interest-rate increases or large-scale sales of U.S. Treasuries.

Under the scenario outlined by Hayes, Japan would pledge its U.S. Treasury holdings through the facility in exchange for dollars, then sell those dollars to purchase yen. 

Hayes said the approach could lead to an expansion of the Fed’s balance sheet if the FIMA facility’s current $60 billion counterparty limit were increased. He estimated that about $1.37 trillion in U.S. Treasuries held by the Japanese government and the Government Pension Investment Fund could potentially be used as collateral.

The additional dollar liquidity generated under such a scenario would be bullish for Bitcoin, gold and Ethereum, according to Hayes.

Source: Arthur Hayes