South Korea Rejects Bitcoin for foreign Exchange Reserves
South korea’s central bank has decided not to include Bitcoin in its foreign exchange reserves.This decision comes after a written inquiry from a National Assembly representative. The Bank of Korea cited Bitcoin’s high volatility as a important concern. They warned that transaction costs could skyrocket if the crypto market becomes unstable.
Bitcoin also fails to meet the International Monetary Fund’s criteria for foreign exchange reserves. These criteria include maintaining liquidity, market stability, and an investment-grade credit rating. Despite global discussions on national crypto reserves, the Bank of Korea remains cautious. Other major financial institutions, like the European Central Bank and the Swiss National Bank, share this skepticism.
some Korean Democratic Party members had urged the central bank to explore Bitcoin’s potential role in the country’s financial system. However, the Financial Services Commission Chairman, Kim Byung-hwan, dismissed the idea as premature.
South Korea is gradually easing its stance on crypto regulations. The financial watchdog is working on lifting restrictions on institutional crypto trading and preparing a legal framework for stablecoin oversight. Policymakers are also considering allowing crypto exchange-traded funds, wich could bring new opportunities to the country’s financial sector.
