South Korea has no plans For Bitcoin

The Central Bank of South Korea has stated that it has no intention of adding Bitcoin to its foreign exchange reserves. In response to a written question from Representative Cha Gyu-geun of the National Assembly’s Planning and Finance Committee, Bank of Korea officials rejected adding Bitcoin to its foreign exchange reserves.

Yonhap media outlet claimed that during a policy seminar on March 6, some Korean Democratic Party members pushed the central bank to investigate Bitcoin’s possible role in the nation’s financial system.

The central bank warned that “transaction costs to cash out Bitcoins could rise drastically” if the cryptocurrency market experiences instability, citing Bitcoin’s high volatility as a key concern.

The International Monetary Fund’s requirements for foreign exchange reserves, which include assets that maintain liquidity, market stability, and a credit rating of investment grade or higher, are not met by Bitcoin.

Globally, national cryptocurrency reserve discussions have gained traction, particularly the fruition of the U.S. Strategic Bitcoin Reserve.  Czech Republic and Brazil, have even indicated that they are amenable to the concept.

However, the Bank of Korea insisted that a “cautious approach” is required, pointing out that other organizations with a similar skeptical attitude include the European Central Bank, the Swiss National Bank, and the financial authorities of Japan.

Olumide Adesina

Financial Market Writer

Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.

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