South Korea Rejects Bitcoin for National Reserves
South Korea’s central bank, the Bank of Korea (BoK), has firmly stated that it will not consider Bitcoin as part of its reserved assets. This decision comes in light of concerns regarding Bitcoin’s volatility and its potential impact on national stability. The announcement follows a recent move by U.S. President Donald Trump, who proposed a strategic reserve for Bitcoin and altcoins aimed at long-term holding.
Bank of Korea’s Stance on Cryptocurrency
The Bank of Korea has expressed significant reservations about including Bitcoin in its foreign exchange reserves. According to a report by the Korea Herald, the BoK has not even initiated discussions on the potential addition of Bitcoin to its asset portfolio. The bank cited the cryptocurrency’s inherent volatility as a major risk factor that could jeopardize the stability of the national economy. Currently, Bitcoin is trading at approximately $83,687, having previously reached a peak of over $108,000.
In its statement, the BoK highlighted that in times of market instability, the costs associated with cashing out Bitcoin could increase dramatically. This unpredictability raises concerns about the cryptocurrency’s reliability as a reserve asset. The bank emphasized that any asset considered for inclusion in national reserves must undergo thorough research and evaluation.
IMF Standards and Cryptocurrency Concerns
The BoK further elaborated on its concerns regarding Bitcoin’s classification as a reserve asset, noting that it does not meet the International Monetary Fund’s (IMF) criteria. The IMF requires reserve assets to maintain consistent liquidity, market value, and credit ratings—criteria that cryptocurrencies currently fail to satisfy. The cryptocurrency market, valued at approximately $2.74 trillion, is subject to various micro and macroeconomic influences that add to its instability.
Given these factors, the BoK has decided against reviewing the possibility of including Bitcoin alongside traditional assets like gold and fiat currencies. Instead, the bank is focusing on establishing regulatory guidelines for corporate participation in the cryptocurrency sector. The Financial Services Commission (FSC) of South Korea has announced that these guidelines are expected to be finalized by April of this year.
Global Perspectives on Bitcoin Reserves
South Korea’s decision aligns with a similar stance taken by Switzerland. The Swiss National Bank (SNB) recently rejected a proposal to integrate Bitcoin into its national reserves after a public consultation. SNB officials cited the extreme volatility and insecurity of cryptocurrencies as key reasons for their decision.
In contrast, U.S. President Trump has embraced Bitcoin, referring to it as “digital gold.” He has directed federal agencies to consolidate their Bitcoin and altcoin holdings into two separate reserves. According to White House Crypto Czar David Sacks, the U.S. government currently possesses around 200,000 Bitcoin tokens, valued at approximately $17.6 billion. Trump has clarified that taxpayer funds will not be used to acquire new Bitcoin or altcoins; instead, only tokens confiscated during investigations will be added to the reserves.
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