South Korea’s Central Bank Says No to Bitcoin Reserve
The Bank of Korea has made it clear: Bitcoin won’t be included in the country’s strategic reserves. Why regulators are keeping their distance from digital gold?
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The decision came down to two critical issues: Bitcoin’s extreme volatility and its failure to meet IMF regulatory standards. Officials warned that BTC’s price swings could cause severe financial losses during forced liquidations.
The central bank stressed that a true reserve currency must offer:
- High liquidity for seamless transactions;
- Price stability to minimize risks;
- Fast circulation in global markets;
- A strong credit rating for financial security.
Despite Bitcoin’s growing role in global finance, the IMF’s guidelines confirm it does not meet reserve currency requirements. The central bank also warned against rushed adoption of financial innovations, advocating for careful risk management.
Check this out: What Is Fiat Currency and Its Role in the Crypto World?
Following this announcement, South Korea is seeing intense debates on crypto policy. Some lawmakers push for crypto adoption, while others call for stricter regulations. Still, efforts continue to ease crypto restrictions and establish a legal foundation for stablecoins.
International Practises
The idea of state-backed Bitcoin reserves is gaining traction after Donald Trump’s announcement of a U.S. strategic Bitcoin reserve, which will be funded using confiscated cryptocurrency from legal cases. However, the lack of direct BTC purchases has left the crypto community divided.
Even with this bold move from the U.S., most countries remain skeptical. Switzerland, Japan, and the European Union have dismissed the idea for now, expressing concerns over stability and regulatory challenges.
Yet, Czechia is taking a different approach—discussions about adding BTC to its national reserves were already underway before the U.S. announcement, signaling a unique shift in policy.
In a world of financial volatility, the Bank of Korea is prioritizing stability over speculation. Rather than embracing risky assets, the regulator opts for trusted financial instruments, ensuring that national reserves remain secure and citizens’ financial futures stay protected.
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