Amid the growing advocation of Bitcoin reserves, the Bank of South Korea has clearly stated that it “has never considered including Bitcoin in its foreign exchange reserves.”
South Korea Officially Says No to Bitcoin Reserves?
In response to a written inquiry from Congressman and member of the Planning and Finance Committee, Che Guigen (transliteration), the Bank of Korea said on the 16th, “We believe that we need to be cautious about including Bitcoin in our foreign exchange reserves.”
This is the first time that the Bank of Korea has explicitly expressed its position on the issue of Bitcoin reserves. The major reason for saying no to Bitcoin reserves, is the high volatility of Bitcoin prices. In response, the Bank of Korea pointed out, “If the virtual asset market becomes unstable, Bitcoin may face the risk of a sharp increase in transaction costs during the cash-out process. We believe that Bitcoin also does not meet the International Monetary Fund (IMF)’s foreign exchange reserve calculation standards. So far, we have never discussed or considered including Bitcoin in foreign exchange reserves.”
The Bank of Korea added: “It is understood that some countries such as the Czech Republic and Brazil have a positive attitude towards this, but the European Central Bank (ECB), the Swiss National Bank and the Japanese government have all expressed opposition.”
South Korea’s significant decision comes at a time when U.S. President Donald Trump, who previously promised a Bitcoin reserve, has now proposed a strategic Bitcoin reserve by including Bitcoins seized through civil and criminal forfeiture procedures, stating that no additional purchases will be made immediately.
