Bank of Korea Rejects Bitcoin for its Foreign Reserves

The Bank of Korea has opted not to include Bitcoin in its foreign exchange reserves due to its high volatility and failure to meet the International Monetary Fund’s guidelines on liquidity and risk management.

This decision follows recent international moves influenced by a Strategic Bitcoin Reserve created from assets confiscated by the previous US administration.

The decision highlights the challenges central banks face when considering cryptocurrencies for reserve management. Bitcoin’s volatility renders it an unreliable store of value, a crucial criterion for foreign exchange reserves. Its non-compliance with IMF guidelines further complicates its integration into official reserves.

This move by the Bank of Korea reflects the cautious stance of many central banks toward cryptocurrencies.