Summary: The Bank of Korea has ruled out adding Bitcoin to its foreign exchange reserves, citing high volatility and liquidity risks. Despite growing global interest, South Korea remains committed to traditional financial assets.
The Bank of Korea (BOK) has officially rejected the idea of including Bitcoin in its foreign exchange reserves, emphasizing concerns over its extreme price swings and liquidity risks. Responding to an inquiry from Representative Cha Gyu-geun, the central bank confirmed that it has not reviewed or discussed Bitcoin as a reserve asset.
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BOK officials, as reported by The Korea Herald, stated that Bitcoin’s price volatility remains too high, with transaction costs potentially surging during market instability. Over the past month, Bitcoin has fluctuated between $98,000 and $76,000 before stabilizing around $83,000, reflecting a 15% drop since mid-February.
The decision comes amid growing global discussions on Bitcoin’s role in national reserves. Earlier this month, U.S. President Donald Trump issued an executive order to establish a strategic Bitcoin reserve.
At a seminar on March 6, crypto advocates and members of South Korea’s Democratic Party called for Bitcoin integration into reserves and the creation of a won-backed stablecoin. However, the BOK maintained that reserve assets must be highly liquid, immediately usable, and hold investment-grade credit ratings—criteria that Bitcoin does not meet.
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Experts suggest that potential IMF approval of stablecoins as foreign reserves could significantly reshape the financial landscape in the future.