Bank of Korea rejected adding bitcoin to its foreign exchange reserves

South Korea's central bank has decided not to add bitcoin to the country's foreign exchange reserves. Addressing the request of Rep. Cha Gyu-geun, representatives of the financial regulator noted the excessive volatility of the cryptocurrency.

Referring to the International Monetary Fund standards, the officials said that bitcoin does not meet its requirements. They also noted that transaction costs for bitcoin conversion could rise sharply during times of market turbulence.

Bank of Korea is committed to maintaining a cautious stance. Echoing the approach of other major central banks, including the European Central Bank and the Bank of Japan, the South Korean regulator has chosen not to initiate formal discussions on the initiative.

Despite abandoning the plan of adding bitcoin to its reserves, South Korea's central bank continues to work on liberalizing the crypto market. The officials are now working on new legislation on stablecoins. As a part of it, a possibility of introducing exchange-traded funds related to cryptocurrencies is being considered.