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17/03/25
42
Bank of Korea Takes Cautious Stance on Bitcoin as Reserve Asset
The Bank of Korea has announced that it is proceeding with caution regarding the potential inclusion of Bitcoin in its foreign exchange reserves. In a response to a query from the National Assembly, officials indicated that they have not explored the option of holding Bitcoin as a reserve asset due to its significant price volatility.
Central bank representatives pointed out that Bitcoin’s instability poses challenges, highlighting the risks associated with transaction costs when attempting to liquidate holdings during market fluctuations. Their statement reflects a broader concern amid recent volatility, as Bitcoin prices have experienced dramatic shifts, ranging from $98,000 to $76,000, before settling at about $83,000 — a 15% decrease since mid-February.
This cautious stance comes at a time when global conversations about cryptocurrencies as part of national financial strategies are intensifying. Recent developments in the U.S., including an executive order aimed at establishing a strategic stockpile of Bitcoin and other digital assets, have prompted discussions in South Korea about the potential benefits of including Bitcoin in national reserves or developing a stablecoin backed by the Korean won.
Despite external pressures, the Bank of Korea maintains that its foreign exchange reserves need to consist of assets that are immediately usable and have a credit rating of investment grade or higher — criteria that Bitcoin currently does not fulfill. This viewpoint was echoed by academic experts who emphasized the importance of holding reserves in proportion to the currencies of trading partners.
As South Korea’s financial regulator continues to assess the regulatory landscape surrounding cryptocurrencies, it is also examining trends in related jurisdictions, such as Japan, particularly in the context of possible avenues for introducing exchange-traded funds associated with cryptocurrencies within its own financial market.
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