The Bank of Korea (BoK) has confirmed that it has no plans to accumulate Bit in its foreign exchange reserves, emphasizing the volatility and non-compliance with the standards of the International Monetary Fund (IMF).

On March 16, the Bank of Korea (BoK) responded to a question from Democratic Party of Korea lawmaker Cha Gyu-geun, a member of the National Assembly's Planning and Finance Committee. BoK confirmed that they have never considered including Bit in the country's foreign exchange reserves.

This is the first time BoK has publicly expressed its views on Bit, as other countries are considering hoarding this digital asset as part of their strategic reserves.

BoK provided three main reasons to reject the possibility of holding Bit in foreign exchange reserves:

1. Excessive price volatility
   • Bit price once reached 160 million won (about $120,000) in January but has recently dropped to 110 million won (about $82,500).
   • Although some experts predict Bit could exceed 1 billion won, BoK warned that it could also fall to 0 at any time.
2. Difficulty in converting to cash
   • BoK believes that if the cryptocurrency market becomes unstable, the transaction costs to convert Bit to cash could skyrocket, posing risks to foreign exchange reserves.
3. Non-compliance with IMF standards
   • According to the IMF, foreign exchange reserves must ensure liquidity, convertibility, and have a high investment-grade credit rating.
   • Bit does not meet these criteria, causing BoK to rule out the possibility of using it in foreign exchange reserves.

Some countries have expressed different positions on Bit in foreign exchange reserves:

• Positive: The Czech Republic and Brazil have expressed interest in considering Bit in their national reserves.
• Negative: The European Central Bank (ECB), the Swiss National Bank (SNB), and the Japanese government have all opposed this.

Previously, on March 6, U.S. President Donald Trump signed an executive order on strategic Bit reserves, but emphasized that the U.S. government will not buy more immediately. Instead, they will use the Bit confiscated from civil and criminal cases.

In South Korea, some experts at the Democratic Party's policy seminar also proposed considering including Bit in foreign exchange reserves, but no official decision has been made.

Although Bit is gaining increasing attention from many countries,the Bank of Korea maintains a cautious stance and has no plans to hold this digital asset in its foreign exchange reserves.

This decision reflects South Korea's conservative approach to managing financial risks and maintaining monetary stability, amid the continued volatility in the cryptocurrency market.