BOK Rejects Bitcoin for Reserves Due to Volatility

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by Giorgi Kostiuk

2 years ago

The Bank of Korea has stated their decision against including Bitcoin in the country's foreign exchange reserves.

Bank of Korea's Statement

The Bank of Korea has stated that it has never considered including Bitcoin in the country's foreign exchange reserves. They highlighted the need for caution in adding Bitcoin to financial assets.

Bitcoin Volatility

According to Korea Economic TV, the bank identified Bitcoin's extreme price volatility as a major concern. The price of Bitcoin has ranged from 160 million won to 110 million won recently. Some experts warn that Bitcoin's value could drop to zero at any time.

IMF Criteria for Reserves

The Bank of Korea explained that Bitcoin does not meet the International Monetary Fund's standards for foreign exchange reserves. According to the IMF, reserves must be liquid, marketable, and expressed in a convertible currency with a high credit rating. It was also noted that other major financial institutions, like the European Central Bank, hold negative views on this matter.

"There has been no discussion or review of Bitcoin's inclusion in foreign exchange reserves."The Bank of Korea

The Bank of Korea firmly excludes the possibility of including Bitcoin in their foreign exchange reserves, emphasizing the cryptocurrency's volatility and non-compliance with international standards.

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