The Bank of Korea has decided not to include Bitcoin in its foreign exchange reserves, citing significant concerns regarding its price volatility. In a response to an inquiry from the National Assembly, the central bank highlighted that Bitcoin does not meet the International Monetary Fund’s (IMF) criteria for reserve assets, which require that assets be liquid, marketable, and in convertible currencies with investment-grade credit ratings. The bank expressed apprehension that if the virtual asset market faces instability, the costs associated with converting Bitcoin into cash could escalate rapidly. This ruling comes amid global discussions on the role of cryptocurrencies in national reserves, particularly in the wake of discussions about establishing a strategic ‘crypto reserve’ by the U.S. President. Furthermore, Japan is also exploring similar concerns regarding Bitcoin’s potential inclusion in their foreign reserves, demonstrating a broader hesitance in the region towards using cryptocurrencies as reserve assets.

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