BOK rules against including Bitcoin in foreign exchange reserves.
The South Korean central bank has advocated for a “cautious approach” to the inclusion of bitcoin in foreign exchange reserves due to its price volatility, officials said on Sunday. Following US President Donald Trump’s announcement earlier this month of a strategic bitcoin reserve and digital asset stockpile, lawmakers have discussed the possibility of include cryptocurrencies in their strategic reserves.
In response to an inquiry from Rep. Cha Gyu-geun of the tiny Rebuilding Korea Party, the Bank of Korea (BOK) stated that it “has neither discussed nor reviewed the possible inclusion of bitcoin in foreign exchange reserves” and that “a cautious approach is needed” on the topic.
In response to an inquiry from Rep. Cha Gyu-geun of the tiny Rebuilding Korea Party, the Bank of Korea (BOK) stated that it “has neither discussed nor reviewed the possible inclusion of bitcoin in foreign exchange reserves” and that “a cautious approach is needed” on the topic.
Cryptocurrencies also fail to meet the International Monetary Fund’s (IMF) standards for foreign exchange reserves, including liquidity, market value, and credit rating, it noted. Meanwhile, earlier this month, the BOK noted increased uncertainty about inflationary pressures caused by continued geopolitical tensions and trade wars among key nations.
BOK Deputy Governor Kim Woong made the statements during a meeting to review the country’s price patterns, following official statistics showing a small decrease in consumer price rise. According to the most recent data, consumer prices in South Korea rose by 2% in February, following a 2.2% increase in January.While inflation is constant, Kim warned that a number of global factors continue to cause price volatility.
“Uncertainties remain high regarding geopolitical situations, trade conflicts among major nations, the foreign exchange rate, and domestic demand,” Kim said, addressing the issues that have thrown inflation estimates into doubt.