Report: South Korea Abandons Consideration of Bitcoin as a Strategic Reserve

South Korea’s Central Bank Dismisses Bitcoin as Reserve Asset, Citing High Volatility

The Bank of Korea (BOK) has ruled out the possibility of holding Bitcoin (BTC) in its foreign exchange reserves, citing significant price fluctuations and liquidity risks, according to a report from Korea Economic Daily.

In response to a query from the National Assembly’s Strategy and Finance Committee, the BOK confirmed on Sunday that it has never considered Bitcoin as a viable reserve asset.

Bitcoin Fails to Meet IMF Reserve Standards

The BOK’s reluctance stems from Bitcoin’s extreme volatility, which it believes could increase transaction costs and pose financial risks when converting BTC to cash.

Additionally, the BOK pointed to the International Monetary Fund’s (IMF) foreign reserve management standards, which emphasize stable liquidity, market risk controls, and credit risk mitigation—criteria that Bitcoin does not meet due to its erratic price movements.

Crypto Market Thrives Despite Central Bank’s Caution

While the BOK remains skeptical of Bitcoin as a reserve asset, South Korea continues to be a key hub for crypto innovation, with local exchanges and blockchain firms generating billions in daily trading volume.

As of Monday afternoon in Asia, Bitcoin was trading at $83,400, down 1% in the past 24 hours.