The Bank of Korea has officially announced that it will not integrate Bitcoin (BTC) into its foreign exchange reserves. This decision arises amid increasing global discussions about the feasibility of incorporating cryptocurrencies into national financial systems.
On March 16, 2025, local media reported that the Bank of Korea has ruled out the addition of Bitcoin as part of its currency reserve strategy. This response came in light of an inquiry from a representative in the National Assembly’s Planning and Finance Committee. The bank expressed significant concerns regarding Bitcoin’s high volatility, which could severely impact transaction costs and liquidity.
Officials emphasized that Bitcoin does not satisfy the International Monetary Fund (IMF) criteria for foreign reserves. These criteria demand that reserve assets exhibit stability, liquidity, and investment-grade credit ratings. Bitcoin’s rapid price fluctuations present a major barrier to its potential inclusion in national reserves.
Despite this firm stance, global interest in national cryptocurrency reserves is surging. Some nations, such as the United States, Brazil, and the Czech Republic, have shown willingness to explore or implement Bitcoin reserves. In contrast, the Bank of Korea remains cautious, aligning with similar perspectives from institutions like the European Central Bank, Japan’s financial authorities, and the Swiss National Bank.
The bank pointed out that, unlike volatile cryptocurrencies, reserve assets should ensure market stability and liquidity. They noted, “Transaction costs to cash out Bitcoins could rise drastically in an unstable market,” making them unsuitable for foreign reserves.
Moreover, discussions around establishing a national Bitcoin reserve are ongoing within South Korea’s political landscape. Some legislators have pushed for a deeper investigation into Bitcoin’s potential impact on the country’s financial framework. Nevertheless, the Financial Services Commission (FSC) has identical reservations regarding the idea, labeling it as premature as recently as November.
Interestingly, South Korea has begun to gradually relax its crypto regulations. The FSC is pursuing changes to facilitate institutional crypto trading and is planning to oversee stablecoins more closely. Further, policymakers are contemplating the approval of crypto exchange-traded funds (ETFs), which could rejuvenate the nation’s financial sector.
