South Korea's central bank has ruled out adding Bitcoin to its foreign exchange reserves, citing high volatility and IMF standards.
Bank of Korea's Decision
On March 16, local media Yonhap reported that the Bank of Korea dismissed the notion of adding Bitcoin following a written inquiry from National Assembly Representative Cha Gyu-geun. The bank noted Bitcoin's high volatility as a risk factor for increased transaction costs during market instability and emphasized that Bitcoin does not meet the IMF's standards for foreign exchange reserves.
Global Discussions on Crypto Reserves
Amid the U.S. government's announcement of creating a Strategic Bitcoin Reserve, discussions on national crypto reserves have intensified. Countries like Brazil and the Czech Republic have shown willingness to explore the idea. However, the Bank of Korea stressed the need for a 'cautious approach,' noting that other major financial institutions such as the European Central Bank, Swiss National Bank, and Japanese financial authorities remain skeptical about including Bitcoin in reserves.
Cryptocurrencies in South Korea’s Financial System
Although Bitcoin has been ruled out for foreign exchange reserves, discussions about the role of cryptocurrencies in South Korea's financial system continue. Members of the Korean Democratic Party urged the Bank of Korea to explore Bitcoin's potential. In related news, Eun-bo Jeong, the Chairman of the South Korea Exchange, is seeking approval for cryptocurrency ETFs to boost market competitiveness.
South Korea remains cautious about incorporating cryptocurrencies into its financial reserves, although the broader role of cryptocurrencies is still under consideration.
