South Korea central bank has made it clear that Bitcoin will not be considered for inclusion in its foreign exchange reserves—at least for now. Officials from the Bank of Korea (BOK) stated in a March 16 response that they have not reviewed nor discussed the possibility of holding Bitcoin as a reserve asset, citing its extreme volatility and high transaction costs during market instability.
The statement came in response to an inquiry from Representative Cha Gyu-geun of the National Assembly’s Planning and Finance Committee. The BOK emphasized that a cautious approach is necessary when considering Bitcoin’s role in national reserves, reinforcing its position that a reserve asset must be liquid, stable, and investment-grade—criteria Bitcoin does not currently meet.
Bitcoin Volatility and Global Reserve Strategies
The Bank of Korea’s rejection of Bitcoin comes amid a heated global debate over the role of crypto assets in national financial policies. Earlier this month, U.S. President Donald Trump signed an executive order establishing a strategic Bitcoin reserve, prompting discussions in South Korea’s financial and political circles.
At a March 6 seminar, crypto industry lobbyists and members of Korea’s Democratic Party advocated for integrating Bitcoin into the country’s reserves and even developing a won-backed stablecoin. However, the Bank of Korea remained skeptical, pointing to Bitcoin’s price swings as a major concern. Over the past 30 days, Bitcoin has fluctuated between $98,000 and $76,000 before settling around $83,000, marking a 15% decline since mid-February.
Professor Yang Jun-seok of Catholic University of Korea supported the central bank’s stance, arguing that foreign exchange reserves should be proportionally held in currencies of key trade partners, rather than volatile assets like Bitcoin.
Crypto Regulations in South Korea
While South Korea hesitates to embrace Bitcoin reserves, its financial regulators have been closely monitoring Japan’s evolving crypto policies. The Japanese Financial Services Agency recently moved toward a more favorable stance on crypto assets, prompting South Korean regulators to reconsider their ban on crypto exchange-traded funds (ETFs).
Meanwhile, Professor Kang Tae-soo of KAIST suggested that the U.S. is more likely to leverage stablecoins rather than Bitcoin to maintain dollar dominance, adding that whether the International Monetary Fund (IMF) will recognize stablecoins as reserve assets will be a crucial factor moving forward.
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