NEWSLETTER
The Korea Bank (Bok) He has fired The possibility of establishing a strategic bitcoin reserve, citing concerns about the volatility and risks of prices. This occurs despite the current global discussions about the use of bitcoin as part of the foreign exchange reserves after the United States plans to create a reserve.
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In response to an investigation by a member of the Strategy and Finance Committee of the National Assembly, the Central Bank rejected bitcoin to its reservations. Bok officials emphasized bitcoin's wild price changes as a key deterrence, stating that transaction costs to convert cashcoin into cash “could drastically increase” if the market experiences instability.
As of March 17, bitcoin quote around $ 83,500, since 23% of its $ 108,000 peak has fallen in January. The Bok warned that this extreme volatility raises significant risks for its reserves.
The Bank also indicated that bitcoin does not meet the criteria of the International Monetary Fund (IMF) for reserve assets. The IMF requires the prudent management of liquidity, market and credit risks for reserves: bitcoin standards currently do not satisfy the eyes of the Bok.
This last position marks the first time that the Central Bank of South Korea has directly approached the possibility of using bitcoin as a reserve asset. He emphasized a “cautious approach” with respect to bitcoin.
The dismissal of a strategic bitcoin reserve occurs despite the growing attention in the potential role of crypto in reserves worldwide. At the beginning of March, the president of the United States, Donald Trump, signed an executive order to establish a strategic bitcoin reserve. This promoted discussions in South Korea and other Asian nations on demand monitoring.
