Bitcoin Will Not Be Included in South Korea's Reserved Assets

South Korea's central bank is not considering Bitcoin to be included as part of its reserved assets. The Bank of Korea (BoK) has reportedly said that Bitcoin's volatility

The Bank of Korea (BoK) has no immediate plans to include Bitcoin in its reserved assets, as the cryptocurrency’s volatility is a matter of risk and concern for the country’s national stability, a report by Korea Herald said Sunday.

The development comes just days after US President Donald Trump announced a strategic Bitcoin and altcoin reserve for the purpose of long-term holding.

The inclusion of any crypto asset in the reserved assets category must be approached with proper research and in a cautious manner, the BoK added.

As of now, South Korea has not even reviewed the possible addition of Bitcoin in its foreign exchange reserves.

Bitcoin, the most expensive cryptocurrency, at its highest has breached the $108,000 price mark. Presently, the asset is trading at $83,687.

“In the case of cryptocurrency market instability, the transaction costs to cash out Bitcoins could rise drastically,” the BoK was quoted as saying.

Elaborating on its Bitcoin-related concerns, the BoK noted that the cryptocurrency failed to meet IMF's standards to be classified as a reserved asset. The IMF guidelines suggest that reserved assets need to maintain their liquidity, market value, and credit rating consistently, which cryptocurrencies cannot promise for now. The crypto sector, currently valued at $2.74 trillion, is strongly impacted by micro and macro-economic factors.

Considering these factors, the BoK said it had not begun reviewing the possibility of having Bitcoin as a reserved asset alongside gold and fiat currencies, among other securities.

For now, South Korea is focussed on defining crypto guidelines for corporate participation. The country's Financial Services Commission (FSC) recently announced that these guidelines would be finalised by April this year.

South Korea has joined Switzerland in dismissing the idea of integrating Bitcoin with their respective national treasuries.

Earlier this month, the Swiss National Bank (SNB) had also rejected the idea of adding Bitcoin to Switzerland's reserved assets. After a public consultation, the SNB was proposed to consider holding a portion of national assets in the form of Bitcoin.

Responding to the query, SNB's Martin Schlegel said cryptocurrencies were extremely volatile and unsecure in nature.

In the US, meanwhile, President Trump has referred to Bitcoin as ‘digital gold'. He has ordered federal agencies to accumulate all of their Bitcoin and altcoin holdings into two separate reserves.

White House Crypto Czar, David Sacks, estimates that the US government presently holds around 200,000 Bitcoin tokens worth around $17.6 billion. Given the volatility of crypto assets, Trump said that taxpayers' money will not be used to purchase fresh BTC and altcoin tokens for the reserve – but tokens confiscated during investigations will be added to these reserves.