South Korea's central bank announced the exclusion of Bitcoin from foreign exchange reserves, citing concerns over volatility and liquidity.
Bank of Korea's Stance
On October 16, the Bank of Korea officially confirmed it has never considered including Bitcoin in foreign exchange reserves, stressing the need for caution. This statement came after inquiries from a National Assembly member seeking clarity. The central bank cited high price volatility and liquidity issues as primary factors excluding Bitcoin.
Bitcoin Volatility Fuels Debate
The latest Bitcoin data shows it trading at $X, fluctuating amid debates over national reserve inclusion. Market reactions echo past trends, highlighting ongoing concerns over digital asset stability. Experts highlight potential regulatory implications and challenges in financial stability should digital currencies gain reserve status.
Global Hesitancy and Other Country Examples
Similar past events include decisions by major central banks like the European Central Bank and the Japanese government avoiding cryptocurrency, citing instability and lack of alignment with traditional reserve assets. Experts assert that without major national bond issuance in Bitcoin, the rationale for holding this digital asset is minimal.
South Korea's decision underscores the cautious approach taken by central banks globally in integrating cryptocurrencies into national reserves amidst persistent challenges regarding digital asset stability and liquidity.
