BOK Rules Out Bitcoin for Reserve Assets

The Bank of Korea has firmly decided against incorporating Bitcoin into its foreign exchange reserves, attributing this decision to Bitcoin's high volatility and failure to meet the IMF's reserve asset criteria, which include liquidity and market stability. This decision was made public following a query from a member of South Korea's National Assembly's Planning and Finance Committee. Despite global discussions on digital assets as part of national reserves, especially following the US's establishment of a Strategic Bitcoin Reserve, the South Korean central bank remains cautious. Bitcoin's price has shown significant fluctuations, recently trading around $83,000, which underscores concerns about transaction costs and liquidity during market instability. While South Korea is easing some crypto regulations and considering crypto ETFs, the Bank of Korea maintains that foreign reserves must be immediately usable and have an investment-grade credit rating, criteria Bitcoin does not fulfill. Experts within the country echo the bank's cautious stance, emphasizing the importance of aligning reserves with currencies of major trading partners.