On Mar. 17, 2025, the Bank of Korea made the first comment about the possibility of adding Bitcoin to its reserves. According to the statement, the central bank of the Republic of Korea is not interested in acquiring Bitcoin, and it has never been.
Why is South Korea not interested in a Bitcoin reserve?
Earlier this March, South Korea’s Democratic Party was urged to request the Bank of Korea to explore the potential of adding Bitcoin to its reserves following the move made by the U.S. government.
The response from the Bank of Korea was negative. The main reason for the lack of interest in adding Bitcoin to its reserves is high volatility. According to the statement from the central bank’s rep, the BTC price trajectory resembles a roller coaster. As there is a potential for a price decline, Bitcoin cannot guarantee that it will provide an expected value in Korean won at any given moment. The reserve asset should be available and usable immediately by request, denominated in a currency with a high credit rating. Bitcoin doesn’t meet the criteria for the reserve asset.
On top of this explanation, the Bank of Korea cited the reluctance of other countries to adopt Bitcoin as the national reserve fund. According to the bank’s statement, although Brazil and Czech had a positive experience of adding Bitcoin to their respective reserves, the European Central Bank, Switzerland, Japan, and others gave a negative assessment of the idea of using Bitcoin as a reserve fund.
It shows that despite many talks about the global crypto race, many countries take a conservative stance on Bitcoin and don’t seem to be eager to compete with the U.S. and other Bitcoin-holding nations. Leaders of these countries don’t fear missing out on something associated with Bitcoin.
Crypto in South Korea
South Korea is one of the world’s largest economies and a crypto-friendly hub. Crypto exchanges are legal and regulated there. Cryptocurrencies are not considered as money. The capital gains associated with crypto are free from taxation.
In the context of political uncertainty and high unemployment rates, the youth in South Korea lean toward cryptocurrencies as an alternative source of financial independence.
More than that, the long-time public familiarity with micropayments (for instance, in social media and games) created a positive environment for embracing crypto. According to the 2021 survey, nearly 50% of Koreans in their 30s are crypto investors.
On top of that, South Korea is home to several vibrant crypto platforms, including Upbit, Bithumb, and HTX.
So, it is clear that the rejection of Bitcoin as a reserve asset is not a continuation of cryptophobic policies but rather a cautious approach by the generally crypto-friendly administration.
Why do other countries reject the idea of a Bitcoin reserve?
The governor of the Czech National Bank introduced a proposal to spend billions on Bitcoin in order to diversify the reserves. Following this, European Central Bank President Christine Lagarde said that Bitcoin is unfit for the ECB reserve as it lacks enough safety and liquidity.
Japan rejected Bitcoin as it doesn’t align with the national reserve strategy. Price volatility and incompatibility with the existing financial frameworks were cited as the reasons. The Swiss central bank cited similar reasons for rejecting Bitcoin. Swiss National Bank (SNB) President Martin Schlegel called crypto “a niche phenomenon” and said that high volatility and low liquidity block Bitcoin from becoming a reserve asset.
Crypto bulls cite other reasons for Bitcoin reserve rejection in these countries. They suggest that officials in these countries simply don’t understand what Bitcoin is and why its inclusion in the national treasury may potentially be game-changing.
Australian Reserve Bank governor Michele Bullock is a perfect example of such an official. In November 2024, she claimed that she didn’t understand Bitcoin, but she didn’t see a role for it in the Australian economy or payment system.
Other Bitcoin proponents suggest that countries like South Korea choose the wrong time to dodge Bitcoin. One of them wrote via X that “betting against Bitcoin in 2025 is like shorting the Internet in 2000.”
Interestingly enough, the long-anticipated creation of the U.S. Strategic Bitcoin Reserve didn’t ignite the crypto market, nor did it set an immediate chain reaction in the world. Michael Saylor’s speeches explaining how important it is for any leading country to hold Bitcoin sound convincing and brilliant for some, but many conservative central bank officials around the globe are not buying them as they have strict criteria for the reserve assets, and Bitcoin doesn’t align with it. They don’t take the unique characteristics of Bitcoin into consideration.
Such a stance paints the U.S. government and other Bitcoin-leaning nations as risk-takers. Time will show which approach was justified.
