Crypto News: Bank of Korea Rejects Bitcoin for Foreign Exchange Reserves
The post Crypto News: Bank of Korea Rejects Bitcoin for Foreign Exchange Reserves appeared first on Coinpedia Fintech News
The Bank of Korea (BOK) has firmly stated that it has “never reviewed” the inclusion of Bitcoin in the country’s foreign exchange reserves. In a response to a written inquiry from Rep. Cha Gyu-geun of the Democratic Party of Korea on March 16, the BOK opened up about the need for caution when considering Bitcoin as part of the country’s financial assets.
This marks the first time the BOK has officially addressed the issue. According to Korea Economic TV, the central bank cited Bitcoin’s extreme price volatility as a major concern. The price of Bitcoin has seen sharp fluctuations recently, soaring to 160 million won in January, before falling to 110 million won. Despite predictions of potential future growth, some experts warn that Bitcoin’s value could drop to zero at any time.
The BOK explained that such instability could lead to increased transaction costs when converting Bitcoin into cash, particularly during periods of market turmoil. Additionally, the bank pointed out that Bitcoin does not meet the International Monetary Fund’s (IMF) standards for foreign exchange reserves. According to the IMF, foreign exchange reserves must be liquid, marketable, and expressed in a convertible currency with a high credit rating.
The Bank of Korea further stated that, to date, no discussions or reviews have taken place regarding Bitcoin’s inclusion in reserves. They said, “There has been no discussion or review of Bitcoin’s inclusion in foreign exchange reserves so far. It is known that some countries, such as the Czech Republic and Brazil, have expressed positive opinions, but the European Central Bank ( ECB ), the Swiss National Bank, and the Japanese government have expressed negative opinions.”
This announcement comes amid broader global debates, with U.S. President Donald Trump recently signing an executive order for a strategic Bitcoin stockpile, although this would involve only Bitcoin seized through legal processes, not new federal purchases.
