The Bank of Korea (BOK) has officially stated that it is not considering incorporating Bitcoin into its foreign exchange reserve.

In response to a written inquiry from a member of the National Assembly’s Strategy and Finance Committee, the central bank said it was concerned about Bitcoin’s high price volatility which could lead to significant transaction costs when converting Bitcoin into cash.

Additionally, Bitcoin does not comply with the International Monetary Fund’s (IMF) guidelines for foreign exchange reserve management, which states that a foreign exchange reserve must control liquidity, market, and credit risks “in a prudent manner.”

South Korea’s position contrasts America, where President Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve.

While the BOK remains hesitant about crypto, South Korea is still taking a progressive stance on the industry.

Last week, South Korea’s Financial Services Commission (FSC), the nation’s top financial regulator, announced plans to issue comprehensive guidelines for institutional cryptocurrency investment by the third quarter of this year.

This initiative marks a significant policy shift, effectively lifting the existing de facto ban on institutional participation in the crypto market and opening the door for substantial capital inflow.

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