Key Points
- The Bank of Korea has rejected the idea of including Bitcoin in its foreign exchange reserves due to its high volatility.
- Global sentiment on Bitcoin reserves remains divided, with major economies such as Japan, South Korea, and Switzerland exercising caution.
The Bank of Korea (BOK) has clarified its stance on the inclusion of Bitcoin (BTC) in its foreign exchange reserves. The central bank stated that it has not discussed or reviewed this possibility.
Bitcoin’s Volatility a Concern for BOK
The BOK’s decision was prompted by concerns about Bitcoin’s extreme volatility. The bank pointed out that transaction costs could increase drastically in the event of cryptocurrency market instability.
The bank’s spokesperson added, “If the virtual asset market becomes unstable, there is a concern that transaction costs will increase rapidly in the process of converting Bitcoin into cash.” This coincides with Bitcoin’s recent price action where it struggled to regain momentum after surpassing the $100,000 mark.
Global Sentiment on Bitcoin Reserves
Despite growing interest in Bitcoin reserves, global sentiment remains divided. South Korea’s cautious approach mirrors that of Japan, where Prime Minister Shigeru Ishiba expressed concerns over the lack of transparency surrounding Bitcoin reserve strategies. This skepticism is also shared by Switzerland and the European Central Bank.
Meanwhile, market confidence in President Trump’s Bitcoin reserve initiative remains lukewarm. Polymarket data shows only a 29% chance of Trump creating a Bitcoin reserve within 100 days. This reflects doubts despite his executive order to establish a Strategic Bitcoin Reserve using seized BTC. As nations continue to debate Bitcoin’s role in financial systems, uncertainty continues to influence global crypto adoption.
