BOK rules out inclusion of bitcoin in foreign exchange reserves
The South Korean central bank has called for a "cautious approach" to an idea of including bitcoin as foreign exchange reserves given its price volatility, officials said Sunday.
There have been discussions among lawmakers about the possible inclusion of cryptocurrencies in its strategic reserves after US President Donald Trump announced the establishment of a strategic bitcoin reserve and digital asset stockpile earlier this month.
In an answer to a question by Rep. Cha Gyu-geun of the minor Rebuilding Korea Party, the Bank of Korea said it "has neither discussed nor reviewed the possible inclusion of bitcoin in foreign exchange reserves" and "a cautious approach is needed" to the matter.
The BOK cited high volatility in bitcoin prices as a major reason.
"In the case of cryptocurrency market instability, transaction costs to cash out bitcoins could rise drastically," the central bank said.
Cryptocurrencies also do not meet the criteria for foreign exchange reserves set by the International Monetary Fund, such as liquidity, market value and credit rating, it added. (Yonhap)
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