Ethereum: Foreign Media: Hayes Says FIMA Expansion Could Benefit Bitcoin

CoinWorld reports:

According to foreign media, Arthur Hayes, co-founder of BitMEX, believes that if the Federal Reserve expands the FIMA tool's limits or relaxes participation criteria, Japan could obtain more dollar liquidity when intervening in the yen without having to directly sell U.S. Treasuries. If this change occurs, it could provide support for Bitcoin, Ethereum, and gold.

Japan Confirms Use of FIMA

The Japanese Ministry of Finance has confirmed that it coordinated with the U.S. to buy yen on July 31 and plans to use FIMA in the future. U.S. Treasury Secretary Scott Bessent has also publicly supported the expansion of this liquidity tool.

FIMA allows approved foreign central banks and monetary authorities to temporarily exchange U.S. Treasuries held at the New York Fed for dollars instead of selling them directly in the market. Hayes believes that if the cap on this tool is significantly raised, Japan could intervene in the currency market on a larger scale while reducing the impact on the Treasury market.

Current Cap is $60 Billion

Under current rules, FIMA has a cap of $60 billion on the outstanding balance for each approved counterparty. The article notes that this cap can be adjusted by relevant Federal Reserve groups, but no public decision to expand it has been made yet.

Hayes links this mechanism to the prices of risk assets, believing that once the Federal Reserve's balance sheet expands due to related operations, scarce currency assets may benefit. However, foreign media also point out that this is merely his market judgment and not a guaranteed outcome of using FIMA.

FIMA is Not Equivalent to Quantitative Easing

The report emphasizes that FIMA is essentially a short-term repurchase tool collateralized by U.S. Treasuries, typically providing overnight or 7-day financing that needs to be repaid. This is different from the quantitative easing where the Federal Reserve directly buys assets.

This means that even if reserve liquidity increases in the short term, it may not replicate the market reactions seen during the quantitative easing period. Whether Bitcoin rises also depends on investor positions, exchange rate changes, and the actual scale and duration of Japan's use of FIMA.

$1.37 Trillion Not All Immediately Usable

Hayes estimates that the U.S. Treasuries held by the Japanese government, combined with the relevant holdings of the Government Pension Investment Fund (GPIF), could form approximately $1.37 trillion in potential collateral. According to U.S. Treasury data, Japan held about $1.143 trillion in U.S. Treasuries as of May; Reuters estimates that GPIF holds about $232.1 billion based on data from the end of March.

However, the report points out that this figure cannot be directly viewed as the total amount immediately available for FIMA. Currently, FIMA is primarily aimed at approved official accounts. To include institutions like GPIF, further relaxation of eligibility criteria would be necessary.

Market Has Not Shown Immediate Reaction

As of Tuesday, Bitcoin was priced at about $63,977, and Ethereum at about $1,625. The article states that this price performance does not indicate that Hayes's judgment has been realized in the market.

The next signals worth observing are twofold: first, whether the Federal Reserve adjusts the $60 billion cap on FIMA or the counterparty rules; second, whether Japan truly begins to use this tool and reflects it in the Federal Reserve's weekly balance sheet data. Until then, this remains a forward-looking view based on policy expectations.

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