The U.S. government may be considering the possibility of owning and managing digital asset reserves, but not all countries share this approach. For example, South Korea has clearly stated its reluctance to include Bitcoin (BTC) or other cryptocurrencies in its foreign exchange reserves.

According to a report by the local media outlet Korea Economic Daily, the country's central bank, the Bank of Korea, has no plans to create a strategic Bitcoin reserve or add it to its foreign exchange reserves.

No Plans for Bitcoin Reserves in South Korea

The Bank of Korea's position was announced in response to an official inquiry from lawmaker Cha Gyu-geun, a member of the Democratic Party of Korea and the National Assembly's Planning and Finance Committee. In its response on March 16, the bank emphasized that it had never considered including BTC in its reserves. Moreover, it highlighted the need for a cautious approach to this idea, citing several reasons.

First, the bank noted that Bitcoin's high volatility poses a significant challenge. The asset's price constantly fluctuates: over the past few weeks, its value dropped from 109,000to109,000to76,700. The Bank of Korea also expressed concerns that market instability could lead to high transaction costs when selling BTC, as well as potential future losses.

Bitcoin Does Not Meet IMF Standards

Additionally, the Bank of Korea pointed out that Bitcoin does not meet the International Monetary Fund (IMF) standards for inclusion in foreign exchange reserves. According to these standards, reserves must be immediately available, have a credit rating no lower than investment grade, possess high liquidity, and be denominated in a convertible currency. The bank believes Bitcoin does not meet these criteria.

"While some countries, such as the Czech Republic and Brazil, have expressed positive views on cryptocurrencies, the European Central Bank (ECB), the Swiss National Bank, and the Japanese government hold opposing views," the Bank of Korea added.

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