The Bank of Korea (BOK) officials have provided clear reasoning behind their decision to dismiss plans for a strategic Bitcoin reserve, emphasizing a cautious approach rooted in financial stability and international standards. Their statements, primarily in response to inquiries from lawmakers, highlight several key concerns.
BOK officials have stressed Bitcoin’s extreme price volatility as a primary deterrent. They’ve noted that the cryptocurrency’s value can experience wild swings—recently trading around $83,500 after dropping 23% from a peak of $108,000 earlier in 2025.
They argue that such fluctuations could lead to significant risks for South Korea’s foreign exchange reserves, which currently stand at approximately $410 billion. Specifically, they’ve pointed out that in times of market instability, transaction costs to convert Bitcoin into cash “could rise drastically,” undermining the liquidity and reliability needed for reserve assets. Another critical point from BOK officials is Bitcoin’s failure to meet the International Monetary Fund’s (IMF) criteria for reserve assets. The IMF requires reserves to be liquid, marketable, and held in convertible currencies with investment-grade credit ratings—standards Bitcoin does not satisfy.
Officials have underscored that foreign exchange reserves must be “immediately usable when needed,” a quality they believe Bitcoin lacks due to its volatility and lack of widespread acceptance as a stable store of value. In a statement responding to a written inquiry from Representative Cha Kyu-geun of the Rebuilding Korea Party on March 16, 2025, the BOK clarified that it “has neither discussed nor reviewed the possible inclusion of Bitcoin in foreign exchange reserves.” This was a direct rebuttal to growing domestic speculation, spurred by the U.S.’s recent move to establish a strategic Bitcoin reserve under President Donald Trump.
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The BOK’s position is that a “cautious approach is needed,” reflecting a broader trend among major central banks like the European Central Bank and the Swiss National Bank, which have similarly expressed reservations about Bitcoin. Officials also contrasted South Korea’s stance with countries like the Czech Republic, where leaders have shown openness to Bitcoin reserves, noting that global opinions remain divided. However, the BOK aligns more closely with conservative financial institutions, prioritizing stability over experimentation.
They’ve indicated no formal discussions have taken place, signaling a firm rejection of the idea for now, even as South Korea’s political landscape—amid potential elections and pro-crypto sentiments from parties like the Democratic Party—pushes for more progressive crypto policies. BOK officials’ statements reveal a deliberate focus on risk aversion, grounded in Bitcoin’s volatility, liquidity challenges, and non-compliance with IMF standards, positioning South Korea as a cautious observer rather than a pioneer in the crypto reserve space.
In the United States, the Trump administration has pivoted toward a crypto-friendly framework. An executive order in January 2025 established a working group to draft new regulations and explore a national digital asset stockpile from seized cryptocurrencies. The U.S. has also repealed stringent IRS DeFi broker rules and paused SEC enforcement actions, signaling a lighter regulatory touch. Stablecoin legislation is gaining traction, with bills like the Clarity for Payment Stablecoins Act under consideration, though a retail central bank digital currency (CBDC) has been ruled out.
