The institution cites the cryptocurrency’s volatility and IMF guidelines as reasons for its decision.
On March 16, the Bank of Korea (BOK) stated that it had not considered incorporating Bitcoin into its foreign exchange reserves, in response to a written inquiry submitted by Representative Cha Kyu-geun, a member of the National Assembly’s Planning and Finance Committee.
The central bank cited Bitcoin’s volatility as the main reason for its negative stance on accumulating the cryptocurrency, as reported by Korea Economic Daily. According to the report, the central bank expressed concern that “volatility in the cryptocurrency market could lead to increased transaction costs when cashing out bitcoin.”
Additionally, according to the BOK, Bitcoin does not comply with the International Monetary Fund’s (IMF) guidelines for managing foreign exchange reserves. The IMF’s directives state that a foreign exchange reserve must “prudently” control liquidity, market, and credit risks.
South Korea has recently taken steps toward easing its cryptocurrency regulations. The country’s financial regulatory authority is currently implementing a plan to gradually lift the ban on institutional trading of digital assets and is preparing to establish its second legal framework, focusing on stablecoin management.
