South Korea rules out Bitcoin for national reserves

The Bank of Korea (BOK) has decided against including Bitcoin (CRYPTO:BTC) in its foreign exchange reserves, citing concerns over its volatility and failure to meet International Monetary Fund (IMF) standards.

The announcement was made in response to a parliamentary inquiry, where the BOK emphasised that Bitcoin's price instability poses significant risks to reserve management.

Bitcoin's erratic price movements could lead to inflated transaction costs when converting it into cash, a risk the central bank is unwilling to take.

Additionally, the IMF's criteria for reserve assets—focused on liquidity, market stability, and credit risk management—are not satisfied by Bitcoin.

According to the BOK, these factors make the cryptocurrency unsuitable for inclusion in South Korea’s reserves.

This cautious stance aligns with the approach of other major institutions, such as the European Central Bank and the Swiss National Bank, which also refrain from holding Bitcoin in their reserves.

Despite global discussions on adopting Bitcoin as a strategic asset, South Korea has opted for a more conservative path.

The decision comes at a time when South Korea’s foreign exchange reserves have been declining, reaching $409.2 billion in February 2025, the lowest level since June 2020.

The drop was primarily due to a reduction in securities holdings.

While some South Korean lawmakers have urged the BOK to explore Bitcoin’s role in the financial system, no formal discussions on this matter have taken place.

Instead, the country continues to focus on easing crypto regulations and exploring institutional trading reforms.

As global interest in cryptocurrency adoption grows, South Korea appears committed to maintaining traditional reserve assets like gold and government bonds while cautiously observing developments in the digital asset space.

At the time of reporting, the BinaryX (BNX) price was $1.79.