The Bank of Korea has “never considered” including Bitcoin in its foreign exchange reserves and views such a prospect “with caution,” according to Korea Economic Daily.
The regulator clarified its stance in response to a query from a member of the National Assembly’s Strategy and Finance Committee.
The primary deterrent cited by the South Korean central bank is the high volatility of the cryptocurrency. There are also concerns that in the event of “market instability in virtual assets,” the costs of converting Bitcoin into cash could surge.
Furthermore, the Bank of Korea stated that the leading cryptocurrency does not meet the standards for foreign exchange reserves. According to recommendations from the IMF, assets included should:
- be liquid and market-traded;
- be denominated in a convertible currency;
- have an investment-grade credit rating or higher.
“It has been reported that some countries, including the Czech Republic and Brazil, have expressed positive views, whereas the ECB, Swiss National Bank, and the government of Japan have taken a negative stance,” the regulator noted in response to the lawmaker’s inquiry.
Back in early March, U.S. President Donald Trump signed an order to create a strategic crypto reserve. A survey showed that 51% of voters do not support the initiative.