The Bank of Korea has confirmed that it does not consider adding bitcoin to its reserves due to Bitcoin's high volatility.
Statement from the Bank of Korea
The Bank of Korea has stated it will not include bitcoin in its reserves due to its high volatility, which could lead to increased transaction costs when exchanging bitcoin for traditional currency. The bank also noted that bitcoin does not meet the International Monetary Fund's guidelines for reserve management, which require 'prudent' management of liquidity, market, and credit risks.
Contrast with US Actions
In contrast to South Korea, the United States has taken steps to establish a strategic reserve of confiscated bitcoins. An executive order signed by President Donald Trump on March 6 provides for the creation of such a reserve as part of the US strategy. This initiative has prompted several countries to consider creating their own reserves, but South Korea, along with Japan, Switzerland, and the European Central Bank, remains cautious.
Changes in South Korean Crypto Policy
Despite reluctance to include bitcoin in reserves, South Korea is easing its strict cryptocurrency regulations. Currently, the country's financial regulator is:
* Gradually lifting the ban on institutional crypto trading * Preparing to establish a second crypto legal framework * Focusing on stablecoin management
These changes indicate that although the BOK remains cautious about bitcoin as a reserve asset, the country continues to develop its approach to integrating cryptocurrency into the financial system.
The Bank of Korea's decision to keep bitcoin out of its reserves highlights a cautious stance on its use, despite global trends, in favor of a more structured approach to cryptocurrencies.
