Bank of Korea Rejects Bitcoin As Foreign Reserve Asset, Citing Instability and Other Factors: Report
South Korea’s central bank reportedly has no plans to include Bitcoin (BTC) in its foreign exchange reserves.
The Bank of Korea said “a cautious approach is needed” when it comes to Bitcoin, citing the top crypto asset’s price volatility, per a new report from The Korea Herald, a South Korean news outlet.
“In the case of cryptocurrency market instability, transaction costs to cash out Bitcoins could rise drastically.”
The Bank of Korea adds that Bitcoin and other crypto assets fail to satisfy the foreign exchange reserve requirements set by the International Monetary Fund (IMF) due to their relatively low liquidity, small market value and non-existent credit rating.
The Korean central bank’s comments on Bitcoin and digital assets come as the US government takes steps to embrace the crypto sector.
Earlier this month, President Donald Trump signed an executive order creating a strategic Bitcoin and crypto reserve.
David Sacks, the White House’s “crypto czar,” said the reserve will be built with Bitcoin that was forfeited as part of criminal or civil asset forfeiture proceedings.
“This means it will not cost taxpayers a dime. It is estimated that the US government owns about 200,000 Bitcoin; however, there has never been a complete audit. The E.O. (executive order) directs a full accounting of the federal government’s digital asset holdings.
The US will not sell any Bitcoin deposited into the Reserve. It will be kept as a store of value. The Reserve is like a digital Fort Knox for the cryptocurrency often called ‘digital gold.’
Premature sales of Bitcoin have already cost US taxpayers over $17 billion in lost value. Now the federal government will have a strategy to maximize the value of its holdings.”
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