South Korea Rules Out Bitcoin as Reserve Asset, Citing Financial Stability Concerns
The Bank of Korea (BOK) has officially dismissed the idea of adding Bitcoin (BTC) to its foreign exchange reserves, citing high volatility and financial risk, according to a Korea Economic Daily report.
Responding to a question from the National Assembly’s Strategy and Finance Committee, the BOK clarified on Sunday that it has never considered Bitcoin a viable reserve asset, emphasizing the need for stability and liquidity in foreign reserves.
Bitcoin’s Market Swings Make It Unfit for Reserves
The BOK highlighted Bitcoin’s extreme price fluctuations, arguing that its instability could lead to excessive transaction costs and unpredictable financial exposure when converting BTC into fiat currency.
Moreover, the BOK referred to the International Monetary Fund’s (IMF) reserve asset standards, which prioritize market stability, creditworthiness, and liquidity—all factors Bitcoin struggles to meet due to its speculative nature.
Crypto Market in South Korea Remains Strong
Despite the BOK’s cautious stance, South Korea remains a major hub for cryptocurrency trading and blockchain development, with local exchanges and firms facilitating billions in daily trading volume.
As of Monday afternoon in Asia, Bitcoin was trading at $83,400, down 1% in the past 24 hours.
