17-3-2025 – South Korea’s central banking authority has firmly dismissed the notion of incorporating Bitcoin into its foreign currency holdings, highlighting concerns over market unpredictability and regulatory compliance.
In a formal response to parliamentary questioning, the Bank of Korea (BOK) categorically ruled out any plans to diversify its reserves with the world’s leading cryptocurrency. The matter came to light following an official inquiry from Cha Kyu-geun, who serves on the nation’s Planning and Finance Committee.
The stance emerged against an intriguing backdrop of South Korea’s broader moves to liberalise its digital asset framework. Whilst regulatory bodies are crafting new guidelines for institutional cryptocurrency trading and stablecoin oversight, the central bank remains steadfast in its conservative approach to reserve management.
At the heart of the BOK’s reluctance lies the thorny issue of Bitcoin’s notorious price swings. The institution’s assessment suggests that such market volatility could substantially inflate transaction expenses during settlement procedures, potentially compromising the stability of national reserves.
Perhaps more tellingly, the bank’s position aligns squarely with International Monetary Fund protocols, which mandate stringent risk management for foreign exchange holdings. These guidelines emphasise the paramount importance of maintaining robust controls over liquidity, market exposure, and credit considerations – criteria that Bitcoin, in the BOK’s assessment, fails to satisfy.
This measured rebuff comes at a particularly noteworthy juncture, as South Korean authorities work to construct their second major regulatory framework for digital assets, with a specific focus on stablecoin governance.
