S.Korea Cuts Out Bitcoin Strategic Reserve Considerations: Report

The IMF emphasizes the importance of prudently managing liquidity, market, and credit risks — criteria that bitcoin, with its erratic nature, does not satisfy.

Mar 17, 2025, 8:49 a.m. UTC

What to know:

South Korea's central bank, the Bank of Korea (BOK), has taken a cautious stance on including bitcoin in its foreign exchange reserves, per a Korea Economic Daily report.

In response to a question posed by a member of the National Assembly's Strategy and Finance Committee, the BOK made it clear on Sunday that it has not entertained the notion of embracing BTC.

The primary deterrent for the BOK is bitcoin's notorious price instability, where the central bank fears that the wild swings in the crypto market could substantially inflate transaction costs when converting bitcoin to

cash, posing a significant risk to its reserves.

The BOK further pointed out that bitcoin fails to meet the International Monetary Fund's (IMF) foreign exchange reserve management standards. The IMF emphasizes the importance of prudently managing liquidity, market, and credit risks — criteria that bitcoin, with its erratic nature, does not satisfy.

South Korea enjoys a flourishing crypto ecosystem, with local startups, tokens, exchanges and firms contributing billions of dollars in daily trading volumes within a relatively insular crypto market.

BTC trades over $83,400 in Asian afternoon hours, down 1% over the past 24 hours.

Shaurya Malwa

Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia with a focus on crypto derivatives, DeFi, market microstructure, and protocol analysis. Shaurya holds over $1,000 in BTC, ETH, SOL, AVAX, SUSHI, CRV, NEAR, YFI, YFII, SHIB, DOGE, USDT, USDC, BNB, MANA, MLN, LINK, XMR, ALGO, VET, CAKE, AAVE, COMP, ROOK, TRX, SNX, RUNE, FTM, ZIL, KSM, ENJ, CKB, JOE, GHST, PERP, BTRFLY, OHM, BANANA, ROME, BURGER, SPIRIT, and ORCA. He provides over $1,000 to liquidity pools on Compound, Curve, SushiSwap, PancakeSwap, BurgerSwap, Orca, AnySwap, SpiritSwap, Rook Protocol, Yearn Finance, Synthetix, Harvest, Redacted Cartel, OlympusDAO, Rome, Trader Joe, and SUN.