No Strategic Bitcoin Reserve in South Korea: Report

The United States government may be keen on owning and maintaining a digital asset stockpile, but not all countries feel the same way. South Korea, for one, has expressed its disinterest in including bitcoin (BTC), or any cryptocurrencies, in its foreign exchange reserves.

A report from the local media Korea Economic Daily revealed that the nation’s central bank, The Bank of Korea, is not considering establishing a strategic bitcoin reserve or even including the asset in its foreign exchange reserves.

No Bitcoin Reserve for South Korea

According to the report, the Bank of Korea unveiled its stance in response to a written inquiry from Representative Cha Gyu-Geun, a member of the Democratic Party of Korea and the National Assembly Planning and Finance Committee.

In the response dated March 16, the Bank of Korea said it has never considered including BTC in its foreign exchange reserves. The bank also mentioned the need to approach the idea of stockpiling BTC cautiously for several reasons.

For starters, the bank insisted that bitcoin’s high volatility would be a challenge. The asset’s price is constantly fluctuating. In the last several weeks, its value has fallen from a high of $109,000 to as low as $76,700. The asset was trading at $83,500 at press time, with a slight 24-hour decline, per data from CoinMarketCap.

The Bank of Korea said it could encounter high transaction costs due to market instability when selling its BTC and risks incurring losses during future bitcoin sales.

BTC Fails to Meet IMF Standards

Additionally, the South Korean central bank asserted that bitcoin does not meet the International Monetary Fund’s (IMF) standards for being included in foreign exchange reserves. The financial institution cited the standards, which state that reserves must be immediately available when needed, have a credit rating of at least qualified investment grade, have liquidity and marketability, and can be expressed in a convertible currency.

To the Bank of Korea, bitcoin does not meet these standards and so cannot be added to the institution’s foreign exchange reserves.

“It is known that some countries, such as the Czech Republic and Brazil, have expressed positive opinions, but the European Central Bank (ECB), the Swiss National Bank, and the Japanese government have expressed negative opinions,” the Bank of Korea added.

The bank’s response follows numerous requests for a strategic bitcoin reserve by South Korean financial experts and Democratic Party lawmakers. The call for a bitcoin reserve in the country comes as the U.S. president establishes a digital asset stockpile in the country.

SPECIAL OFFER (Sponsored)

Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 exclusive welcome offer on Binance (full details).

LIMITED OFFER for CryptoPotato readers at Bybit: Use this link to register and open a $500 FREE position on any coin!

  • Aniket Pujari

    Aniket Pujari

    Aniket Pujari, a graduate in Financial Markets, is the founder of Minute To Know News, a digital platform providing daily news updates on cryptocurrencies, finance, and economics. With a passion for finance and technology, Aniket has been exploring the world of cryptocurrencies since 2015, building a deep understanding of these rapidly evolving industries.

    Related Posts

    Four.Meme Suffers Another Security Breach, $130K Stolen in Latest Attack

    The BNB Chain-based meme coin launch platform Four.Meme was attacked once again. PeckShield has reported a fresh attack that resulted in the theft of approximately 200 BNB (worth around $130,000). The…

    VeChain gets MiCAR nod for VET and VTHO whitepapers

    VeChain has announced its tokens are compliant with European regulations after receiving confirmation from the European Securities and Markets Authority. VeChain (VET), the blockchain for real world decentralized applications, shared…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Ram Owner Wants to Bring Cheaper Pickup Back to US

    Elon Musk and DOGE efforts to close USAID likely unconstitutional, agency must be restored, judge rules

    Four.Meme Suffers Another Security Breach, $130K Stolen in Latest Attack

    Four.Meme Suffers Another Security Breach, $130K Stolen in Latest Attack

    VeChain gets MiCAR nod for VET and VTHO whitepapers

    VeChain gets MiCAR nod for VET and VTHO whitepapers

    The Fed will update its rate projections Wednesday. What to expect

    The Fed will update its rate projections Wednesday. What to expect

    Sequoia to Reap 25-Fold Return from Wiz’s Sale to Alphabet