The Financial institution of Korea has said that it’s approaching the concept of together with Bitcoin in its overseas alternate reserves with warning, citing issues over the cryptocurrency’s excessive value volatility.
In a 16 March 2025 response to a written inquiry, central financial institution officers confirmed that they’ve neither mentioned nor reviewed the potential for including Bitcoin to South Korea’s overseas reserves.
Their response got here after Consultant Cha Gyu-geun of the Nationwide Meeting’s Planning and Finance Committee raised the difficulty. In response to studies from The Korea Herald, the central financial institution careworn {that a} “cautious method is required.”
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Bitcoin’s Volatility Raises Issues
The Financial institution of Korea pointed to Bitcoin’s unpredictable value swings as a main concern. Officers famous that in occasions of market instability, transaction prices to liquidate Bitcoin may enhance sharply, making it a dangerous asset for overseas reserves.
Over the previous 30 days, Bitcoin’s value has fluctuated between $98,000 and $76,000 earlier than stabilizing round $83,000—a 15% decline since February 16, in line with CoinGecko.
The dialogue surrounding Bitcoin as a reserve asset has gained momentum globally, notably after U.S. President Donald Trump’s latest govt order establishing a strategic Bitcoin reserve and digital asset stockpile.
At a seminar on March 6, crypto business lobbyists and a few members of Korea’s Democratic Occasion urged the federal government to think about integrating Bitcoin into its nationwide reserves and to develop a won-backed stablecoin.
Nevertheless, the Financial institution of Korea stays agency on its reserve asset standards, emphasizing that overseas alternate holdings should be liquid, readily accessible, and have an investment-grade credit standing—necessities it believes Bitcoin doesn’t meet.
NEW:
North Korea joins the Strategic Bitcoin Reserve Race.
– BTC held: 13,562 pic.twitter.com/Ybru2wpfu4
— Fiat Archive (@fiatarchive) March 17, 2025
Professor Yang Jun-seok of Catholic College of Korea agreed with the central financial institution’s stance, stating that overseas reserves needs to be allotted based mostly on the currencies of main buying and selling companions.
In the meantime, Professor Kang Tae-soo of KAIST’s Graduate College of Finance instructed that the U.S. is extra more likely to leverage stablecoins rather than Bitcoin to take care of greenback dominance.
He added that the Worldwide Financial Fund’s (IMF) recognition of stablecoins as official reserves may considerably influence future financial insurance policies.
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South Korea Confirms New Regulation For Institutional Crypto Investments By Q3
Final week, South Korea’s Monetary Companies Fee (FSC) introduced plans to subject complete tips for institutional cryptocurrency funding by the third quarter of 2025.
The FSC revealed its roadmap throughout a gathering with native crypto business consultants on Wednesday, 12 March 2025.
Not too long ago, the nation additionally revealed that its crypto guidelines may change as the federal government plans to raise the company crypto buying and selling ban, paving the best way for Korean crypto capital.
On 13 February 2025, the nation introduced that it’s lifting its long-standing crypto buying and selling ban. The choice has now made it attainable for establishments, non-profits, and different company entities to interact in crypto transactions within the nation.
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Key Takeaways
- The Financial institution of Korea stays cautious about including Bitcoin to its overseas reserves as a result of its excessive volatility.
- Officers emphasize that reserve belongings should be liquid, accessible, and investment-grade, standards Bitcoin doesn’t meet.
- In the meantime, South Korea is shifting towards institutional crypto adoption by lifting its company buying and selling ban.
The publish Financial institution Of Korea Takes Cautious Stance On Bitcoin As Reserve appeared first on 99Bitcoins.
