Bank of Korea Dismisses Bitcoin Reserve Rumors as Global Crypto Discussions Intensify

• The Bank of Korea (BOK) denied any plans to include Bitcoin in its foreign exchange reserves, citing high volatility and IMF standards.
• Bitcoin’s extreme price fluctuations raise concerns about transaction costs and liquidity for reserve assets.
• While some countries explore BTC reserves, major financial institutions remain skeptical about its suitability.

In a decisive statement, the Bank of Korea (BOK) has denied any plans to include Bitcoin in the country’s foreign exchange reserves, clarifying that the idea has “never been reviewed.” This response came on March 16 after Rep. Cha Gyu-geun of the Democratic Party of Korea formally inquired about the possibility of BTC being recognized as part of Korea’s financial assets.  

This marks the first official stance from South Korea’s central bank on the matter. According to a report from Korea Economic TV, the BOK highlighted Bitcoin’s extreme volatility as a primary reason for caution. The digital asset has experienced dramatic price swings, soaring to 160 million won ($119,000) in January before tumbling to 110 million won ($82,000). While some analysts foresee continued growth, skeptics warn that Bitcoin’s value could collapse entirely.

Bitcoin’s Volatility Raises Red Flags  

The BOK elaborated on the potential risks associated with Bitcoin’s inclusion in foreign reserves. High volatility could significantly increase transaction costs when converting BTC into cash, particularly during market downturns. Moreover, the bank emphasized that BTC fails to meet the International Monetary Fund (IMF) standards for foreign exchange reserves, which require assets to be highly liquid, easily tradable, and denominated in a stable, creditworthy currency.  

The central bank reaffirmed that no discussions or reviews on BTC reserves have ever taken place. “There has been no discussion or review of Bitcoin’s inclusion in foreign exchange reserves so far,” the BOK stated. While some nations, such as Brazil and the Czech Republic, have shown interest in BTC reserves, major financial institutions, including the European Central Bank (ECB), the Swiss National Bank, and the Japanese government, have taken a more skeptical stance.  

A Global Debate on Bitcoin Reserves  

The BOK’s statement comes at a time when Bitcoin’s role in national reserves is being hotly debated worldwide. Notably, U.S. President Donald Trump recently signed an executive order to establish a strategic BTC stockpile though this initiative focuses on BTC seized through legal processes rather than new federal acquisitions.  

As BTC adoption continues to rise, central banks remain divided on whether the world’s leading cryptocurrency should be recognized as a legitimate reserve asset. With South Korea’s central bank firmly dismissing the idea, for now, the global discussion surrounding Bitcoin’s role in national reserves is far from over.

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