The Bank of Korea has decided against adding Bitcoin to its foreign exchange reserves, citing high volatility and liquidity risks.
Bank of Korea's Decision
The Bank of Korea has not reviewed or discussed adding Bitcoin to its foreign exchange reserves due to significant price volatility and potential liquidity risks. BOK officials highlighted that Bitcoin's price volatility is very high, and transaction costs could surge during market instability, according to [The Korea Herald](https://www.koreaherald.com/article/10442438).
Global Bitcoin Discussions
Global discussions on the role of Bitcoin in national reserves are gaining momentum. Earlier this month, U.S. President Donald Trump issued an executive order to establish a strategic Bitcoin reserve. In South Korea, crypto industry advocates and Democratic Party members urged the integration of Bitcoin into reserves and the development of a won-backed stablecoin during a seminar on March 6.
Risks and Liquidity Criteria
BOK stressed that reserves must be highly liquid, immediately usable, and have investment-grade credit. These criteria are not met by Bitcoin. An expert noted that the IMF's potential approval of stablecoins as foreign exchange reserves could lead to significant changes in the market.
The Bank of Korea has rejected the inclusion of Bitcoin in its foreign reserves due to its volatility and other financial risks, maintaining its focus on traditional financial assets.
