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South 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.
Updated Mar 17, 2025, 1:45 p.m. Published Mar 17, 2025, 8:49 a.m.
What to know:
- The Bank of Korea (BOK) has expressed reservations about including bitcoin in its foreign exchange reserves due to its price instability and potential risk to reserves.
- The BOK also stated that bitcoin does not meet the International Monetary Fund's foreign exchange reserve management standards, which emphasize prudent management of liquidity, market, and credit risks.
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.
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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.
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What to know:
- The IMF warns that USD-pegged stablecoins could undermine local currencies in emerging markets by facilitating currency substitution and capital outflows.
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