South Korea drops Bitcoin in foreign exchange reserves
- South Korea rejects Bitcoin reserves.
- Volatility as a factor.
- Relaxed crypto regulation.
South Korea has recently made its stance clear on the largest cryptocurrency on the market: the Bank of Korea (BOK) has announced that it does not intend to include Bitcoin in its foreign exchange reserves. The decision, which was revealed in response to a consultation by the National Assembly, highlights the country’s caution regarding the asset’s volatility, according to com information from Korea Economic Daily.
Bitcoin's high volatility was the main reason cited by BOK. According to the publication, the banking institution highlighted its concerns about the transaction costs that could arise when liquidating the cryptocurrency in times of instability. In addition, the bank also emphasized in its statement that the cryptocurrency does not meet the International Monetary Fund (IMF) guidelines for managing foreign exchange reserves, which require strict control of liquidity, market and credit risks.
The decision contrasts with the recent move in the United States, where President Donald Trump signed an executive order to create a Bitcoin Strategic Reserve, using cryptocurrencies seized from illicit activities. announcement, by David Sacks, nicknamed the 'Crypto Czar', highlighted the significant step in the institutional adoption of cryptocurrencies by the US government. David Sacks reported that the decision to form the reserve will not impact the budget of American taxpayers.
The US government's move has fueled global debates over central bank adoption of Bitcoin, but South Korea is aligning itself with countries such as Japan, Switzerland and members of the European Central Bank, who have also expressed skepticism about creating a BTC reserve.
Despite its conservative stance on Bitcoin as a reserve currency, South Korea is moving forward with the process of easing its regulations for the sector, with plans to gradually lift the ban on institutional cryptocurrency trading, in addition to preparing for the implementation of the second legislation focused on the management of stablecoins.
At the time of publication, the price of Bitcoin was quoted at US$83.078,24, up 0.5% in the last 24 hours.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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