South Korea Rejects Bitcoin as Foreign Exchange Reserves

The Bank of Korea (BOK), South Korea’s central bank, has reaffirmed that it has no plans to include Bitcoin in the country’s foreign exchange reserves.

According to a report by the Korea Economic Daily on Sunday (March 16, 2025), the BOK stated that Bitcoin’s high volatility is the primary reason behind this decision.

They are concerned that Bitcoin’s price instability could lead to significant transaction cost spikes when liquidating assets.

Additionally, the BOK emphasized that Bitcoin does not meet the guidelines set by the International Monetary Fund (IMF) for managing foreign exchange reserves.

The IMF mandates that foreign exchange reserves must be managed with prudence, ensuring liquidity control, market risk, and credit risk.

Comparison with U.S. Policy

Based on the information we quoted from the Coinvestasi media, the BOK’s decision contrasts with the approach taken by the United States.

On March 6, 2025, U.S. President Donald Trump signed an executive order to establish the Strategic Bitcoin Reserve (SBR), using Bitcoin seized from various criminal and civil cases.

This move has prompted some countries to consider creating their own Bitcoin reserves.

However, South Korea remains skeptical of this initiative, aligning with the stance held by Japan, Switzerland, and the European Central Bank, which have also shown no interest in adopting Bitcoin as a national reserve asset.

South Korea’s Crypto Regulations Are Loosening

Despite its skepticism toward Bitcoin as a foreign exchange reserve, South Korea is showing positive signals in its overall cryptocurrency regulations.

The country’s financial authorities are drafting plans to gradually lift the ban on cryptocurrency trading by financial institutions, which had previously been strictly enforced.

Additionally, South Korean regulators are reportedly preparing a second legal framework for the crypto industry, focusing on stablecoin management and other technical aspects within the digital asset ecosystem.

The BOK’s decision not to include Bitcoin in its foreign exchange reserves reflects the country’s cautious approach to crypto assets, even as regulatory frameworks continue to evolve positively.

Conclusion: South Korea Maintains a Cautious Stance on Bitcoin as a Reserve Asset

The Bank of Korea’s decision to exclude Bitcoin from its foreign exchange reserves demonstrates the government’s conservative stance on cryptocurrency.

While some countries, like the United States, are considering Bitcoin as part of their financial strategies, South Korea remains skeptical due to Bitcoin’s high volatility and the IMF’s regulatory standards.

However, on the other hand, South Korea’s crypto regulations are gradually becoming more flexible, creating opportunities for the digital asset industry to grow within the country.

This approach highlights that while South Korea does not adopt Bitcoin as a national reserve asset, it remains open to innovation within the broader crypto ecosystem.

---