The Bank of Korea revealed it has no plans to stockpile Bitcoin in its foreign exchange reserves, citing concerns over its volatility.
This is the first time the country’s apex bank has publicly stated its position on digital assets, particularly regarding Bitcoin stockpiling.
The bank’s position stems from the volatility of the crypto market and how it affects transaction costs.
“ if the virtual asset market becomes unstable, there is concern that transaction costs will increase rapidly in the process of converting Bitcoin into cash.” Bitcoin does not meet these standards.
“There has been no discussion or review of Bitcoin’s inclusion in foreign exchange reserves so far. The bank noted.
The bank’s reaction is a follow-up to Donald Trump’s approval of a Bitcoin strategic reserve in the United States. The United States’ approval of an SBR will likely catalyze other countries to follow suit.
Bank of Korea’s Official Position on an SBR
On March 16, Rep. Cha Gyu-geun of the Democratic Party of Korea, a member of the National Assembly Planning and Finance Committee, questioned the Bank of Korea’s official position on including Bitcoins in its foreign reserves.
The Bank took a cautious approach, highlighting that Bitcoin falls below the International Monetary Fund’s standard for reserve assets.
We believe that we need to approach the inclusion of Bitcoin in foreign exchange reserves cautiously.”
Some in the market have rosy predictions that Bitcoin could exceed 1 billion won in the future, while others say it would not be strange if it dropped to 0 won at any moment.
“We judge that it does not meet the International Monetary Fund ( IMF ) foreign exchange reserve calculation standards.” Since foreign exchange reserves must be able to be used immediately when needed. The Bank noted
The Bank of Korea’s near-negative stance on the issue is not an isolated case. The European Central Bank ( ECB ), the Swiss National Bank, and the Japanese government have all expressed negative opinions regarding including Bitcoin in their foreign reserves.
At the time of the report, Bitcoin was trading for $83,338, down 23% from its all-time high of $108,738.
