There is no Bitcoin Strategic Reserve in South Korea: Report

The United States government may be interested in possessing and maintaining a reserve of digital assets, but not all countries feel the same. South Korea, for example, has expressed its disinterest by including Bitcoin (BTC), or any cryptocurrencies, in its foreign exchange reserves.

TO report Of the local media, Korea Economic Daily revealed that the Central Bank of the Nation, the Bank of Korea, is not considering establishing a strategic Bitcoin reserve or even including the asset in its foreign exchange reserves.

There is no bitcoin reservation for South Korea

According to the report, the Bank of Korea announced its position in response to a written investigation of the representative Cha Gyu-Geun, a member of the Korean Democratic Party and the National Planning and Finance Committee of the Assembly.

In the response of March 16, the Bank of Korea said it has never considered including BTC in its foreign exchange reserves. The bank also mentioned the need to address the idea of ​​storing BTC with caution for several reasons.

To begin with, the bank insisted that Bitcoin’s high volatility would be a challenge. The price of the asset constantly fluctuates. In recent weeks, its value has fallen from a maximum of $ 109,000 to only $ 76,700. The asset was quoted at $ 83,500 at the time of the publication, with a slight decrease of 24 hours, due to coinmarketcap data.

The Bank of Korea said it could find high transaction costs due to market instability by selling its BTC and runs the risk of incurring losses during future Bitcoin sales.

BTC does not meet the IMF standards

In addition, the Central Bank of South Korea said that Bitcoin does not meet the standards of the International Monetary Fund (IMF) to be included in currency reserves. The financial institution cited the standards, which establish that reserves must be available immediately when necessary, have a credit rating of at least qualified investment, have liquidity and commercialization, and can be expressed in a convertible currency.

For the Bank of Korea, Bitcoin does not meet these standards and, therefore, cannot be added to the institution’s foreign exchange reserves.

“It is known that some countries, such as the Czech Republic and Brazil, have expressed positive opinions, but the European Central Bank (ECB), the Swiss National Bank and the Japanese government have expressed negative opinions,” added the Bank of Korea.

The Bank’s response follows numerous requests from a strategic Bitcoins reserve of South Korean financial experts and legislators of the Democratic Party. The call to a Bitcoin reserve in the country occurs when the president of the United States establishes a storage of digital assets in the country.