The Bank of Korea has stated it maintains a "cautious stance" regarding potential Bitcoin (BTC) reserve holdings, despite recent calls from lawmakers and crypto advocacy groups to explore this option.
Key Details from the Central Bank's Position
- No Formal Discussions: Officials confirmed on March 16 that the proposal hasn't been reviewed or debated internally.
- Volatility Concerns: The bank cited Bitcoin's extreme price fluctuations as incompatible with reserve requirements.
- Liquidity Requirements: Reserves must be immediately accessible and maintain investment-grade credit ratings—standards Bitcoin currently fails to meet.
Market Context
Bitcoin's price swung between $76,000 and $98,000 over 30 days before stabilizing near $83,000 (per CoinGecko data). This volatility reinforced the bank's hesitation.
Global Crypto Reserve Debates
The discussion aligns with broader international trends, including:
- The U.S. executive order exploring strategic Bitcoin reserves
- Japan's regulatory reviews of crypto assets
- South Korea's pending decision on cryptocurrency ETF bans
👉 Explore how global markets are adapting to crypto reserves
Academic Perspectives
| Expert | Institution | Key Insight |
|---|---|---|
| Prof. Yang Junsuk | Catholic University of Korea | Reserves should mirror trade partner currencies |
| Prof. Kang Taesoo | KAIST Graduate School of Finance | Stablecoins may better serve dollar hegemony than Bitcoin |
Industry Proposals
Crypto lobbyists and Democratic Party members recently urged:
- BTC national reserve inclusion
- Development of KRW-backed stablecoins
The bank countered that such assets lack the stability required for sovereign reserves.
FAQ
Q: Why won't South Korea hold Bitcoin reserves?
A: The bank prioritizes liquidity and credit ratings—criteria Bitcoin's volatility disqualifies.
Q: Are other countries adopting crypto reserves?
A: The U.S. and Japan are exploring frameworks, but no major economy has fully committed yet.
Q: Could stablecoins become reserves?
A: Experts debate this possibility, noting IMF approval would be crucial for legitimacy.
👉 Learn about evolving reserve strategies in digital finance
Regulatory Outlook
South Korea continues monitoring global crypto policies while maintaining its conservative reserve stance—a contrast to private sector enthusiasm for blockchain innovation.