Bank of Korea Rejects Bitcoin as a Reserve Asset

Despite growing global discussions about Bitcoin’s role in national reserves, the Bank of Korea (BOK) has made it clear that it has no plans to include the cryptocurrency in its holdings. According to a recent report by Korea Economic TV, the central bank has never considered Bitcoin as a viable reserve asset.

Bitcoin Deemed Too Volatile for National Reserves

The Bank of Korea cited extreme price fluctuations as a primary reason for excluding Bitcoin from its foreign exchange reserves. The institution maintains that stability is a key factor in selecting reserve assets, and Bitcoin’s unpredictable nature does not align with these criteria.

This stance comes amid ongoing pressure from some South Korean industry leaders, who have urged the ruling Democratic Party of Korea (DP) to take a position on the U.S. government’s recent Bitcoin reserve initiative. Earlier this month, the United States established an official cryptocurrency reserve composed of confiscated Bitcoin. The U.S. also announced plans to expand its digital asset holdings to include other cryptocurrencies.

Political Inquiry into Bitcoin’s Reserve Status

Following the U.S. move, a member of South Korea’s Democratic Party formally requested clarification on the central bank’s position regarding Bitcoin reserves. With South Korea ranked as the world’s 12th largest economy and holding approximately $410 billion in total reserves, the inquiry sparked fresh discussions about whether the country should follow global trends in digital asset adoption.

However, the Bank of Korea has reaffirmed its cautious approach, prioritizing traditional assets like foreign currencies, gold, and government bonds over digital currencies.

Global Central Banks Remain Divided on Bitcoin Reserves

South Korea’s decision aligns with those of other major central banks. In January, Christine Lagarde, President of the European Central Bank (ECB), dismissed adding Bitcoin to reserve portfolios. Her statement followed a proposal by Ales Michl, Governor of the Czech National Bank, who suggested allocating billions to Bitcoin as part of a diversification strategy.

While some financial leaders advocate for Bitcoin as a hedge against economic instability, most major central banks remain skeptical about regulatory uncertainty and market volatility.

Future of Bitcoin in National Reserves

As digital assets continue to evolve, the debate over Bitcoin’s place in national reserves is far from over. While countries like the U.S. are making initial steps toward accumulating crypto assets, conservative financial institutions like the Bank of Korea retain their stance on traditional investment strategies.

Whether Bitcoin will eventually earn a place in central bank reserves remains an open question. South Korea’s financial authorities are firm on caution, favoring stability over potential high-risk, high-reward opportunities in cryptocurrency.

Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.

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