Bank of Korea's Position on Including Bitcoin in Foreign Exchange Reserves: "Caution Needed"

"Concerns Over Increased Transaction Costs Due to High Price Volatility"
"No Consideration Has Been Made"

The Bank of Korea has shown a cautious stance regarding the inclusion of Bitcoin in foreign exchange reserves.

On the 16th, the Bank of Korea responded to a written inquiry from Cha Gyu-geun, a member of the National Assembly's Planning and Finance Committee from the Innovation Party, stating, "We believe it is necessary to approach the inclusion of Bitcoin in foreign exchange reserves with caution." This is the first time the Bank of Korea has expressed its position on Bitcoin reserves.

The first reason cited by the Bank of Korea is the high price volatility. The price of 1 Bitcoin surged to around 160 million won in January but recently plummeted to about 110 million won, showing sharp fluctuations. The Bank of Korea stated, "If the virtual asset market becomes unstable, there is a concern that transaction costs could sharply increase during the process of converting Bitcoin into cash."

Furthermore, it said, "We judge that it does not meet the International Monetary Fund (IMF)'s criteria for calculating foreign exchange reserves." The Bank of Korea also replied, "So far, there has been no discussion or review regarding the inclusion of Bitcoin in foreign exchange reserves."

The Bank of Korea added, "While some countries such as the Czech Republic and Brazil are known to have expressed positive opinions, the European Central Bank (ECB), Swiss National Bank, and the Japanese government have expressed negative views."