icon
icon
icon
icon
Upgrade
Upgrade

News /

Articles /

South Korea's Central Bank Rejects Bitcoin for Reserves Citing Volatility

Coin WorldMonday, Mar 17, 2025 4:56 am ET
1min read

South Korea's central bank, the Bank of Korea (BOK), has officially ruled out the possibility of including Bitcoin in its foreign exchange reserves. This decision comes after a member of the National Assembly's Strategy and Finance Committee inquired about the bank's stance on the matter. The BOK's response was clear: it has not considered or reviewed the inclusion of Bitcoin in its reserves, citing the cryptocurrency's notorious price volatility as the primary deterrent.

The BOK expressed concerns that the wild price swings in the crypto market could significantly inflate transaction costs when converting Bitcoin to cash, posing a substantial risk to its reserves. Additionally, the central bank pointed out that Bitcoin does not meet the International Monetary Fund's (IMF) foreign exchange reserve management standards. The IMF emphasizes the importance of prudently managing liquidity, market, and credit risks—criteria that Bitcoin, with its erratic nature, does not satisfy.

Despite South Korea's thriving crypto ecosystem, with local startups, tokens, exchanges, and firms contributing significantly to the market, the BOK's decision underscores its cautious approach towards digital currencies. The central bank's priority remains the stability and reliability of its reserve management strategies, which are not currently met by Bitcoin's volatile nature.

This move by the BOK is indicative of a broader trend among central banks globally, which are increasingly wary of the risks associated with cryptocurrencies despite their growing popularity. The rejection of Bitcoin as a reserve asset highlights the challenges that digital currencies face in gaining mainstream acceptance, particularly in the realm of national financial reserves. The BOK's decision is likely to influence other central banks in the region, reinforcing the notion that traditional financial instruments remain the cornerstone of reserve management.

Comments

Post
daarkann
21 hour ago
Bitcoin's too sketchy for BOK's taste. Traditional vibes still ruling the reserve game. Not gonna lie, I'm holding some BTC on the side, but not betting the farm on it.
0
howtospellsisyphus
19 hour ago
@daarkann I got some BTC too, but not going all-in. It's like diversifying, ya know?
0
vivifcgb
17 hour ago
@daarkann How long you been holding BTC? Any specific strategy or target?
0
Hoshigetsu
21 hour ago
Crypto wild west, BOK sticking to traditional
0
HJForsythe
21 hour ago
Central banks scared of crypto's unpredictability
0
GnosticSon
21 hour ago
BOD's move aligns with global trends. Central banks eyeing risks more closely. Crypto gotta prove itself more
0
ArgyleTheChauffeur
21 hour ago
$TSLA more stable than Bitcoin, IMO.
0
Booknerdworm
20 hour ago
@ArgyleTheChauffeur I had $TSLA, sold early. Regretted it when it mooned. FOMO hits hard when missing out on gains.
0
wodentx
20 hour ago
@ArgyleTheChauffeur How long you holding $TSLA? You think it's a safer bet than Bitcoin for the long haul?
0
PvP_Noob
21 hour ago
BOK playing it safe with fiat 💪
0
Smart-Material-4832
19 hour ago
@PvP_Noob BOK stacking fiat like it's crypto 🚀
0
shakenbake6874
21 hour ago
BOK playing it safe with fiat. Crypto's too risky, huh? Traditional wins again, but who knows what the future holds?
0
Substance_Technical
20 hour ago
@shakenbake6874 True, BOK sticking with fiat. Crypto's too risky for them.
0
enosia1
21 hour ago
Bitcoin no reserves, but still some adoption
0
Affectionate_You_502
18 hour ago
@enosia1 What's your take on other cryptos?
0
YungPersian
21 hour ago
Volatility sucks, hodling $BTC just a portion
0
BoomsRoom
21 hour ago
Volatility's a killer, fam. BOD's call not surprising. Crypto's like the meme stocks of the reserve world
0
_Ukey_
21 hour ago
BOK playing it safe with the Bitcoin rejection. Volatility's a big no-no for reserve management. 🚫
0
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
You Can Understand News Better with AI.
Whats the News impact on stock market?
Its impact is
fork
logo
AInvest
Aime Coplilot
Invest Smarter With AI Power.
Open App