On Mar. 17, 2025, the Bank of Korea made its first remark on 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.

Table of Contents

• Why is South Korea not interested in a Bitcoin reserve?
• Crypto in South Korea
• Why do other countries reject the idea of a Bitcoin reserve?

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 representative, 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, and Bitcoin doesn’t meet the criteria for a reserve asset.

Furthermore, the Bank of Korea cited the reluctance of other countries to adopt Bitcoin as a national reserve fund. According to the bank’s statement, although Brazil and the Czech Republic have 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.

This indicates that despite discussions about the global crypto race, many countries take a conservative stance on Bitcoin and do not seem eager to compete with the U.S. and other Bitcoin-holding nations. Leaders of these countries do not 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 money. The capital gains associated with crypto are free from taxation.

> Before you come at South Korea, reminder the country imposes 0% capital gains tax in crypto so yeah they understand Bitcoin pretty, pretty well as well as the definition of a strategic reserve by the people, for the people Link — Jeff Park (@dgt10011) March 17, 2025

In the context of political uncertainty and high unemployment rates, the youth in South Korea lean towards cryptocurrencies as an alternative source of financial independence.

Moreover, the long-time public familiarity with micropayments (for example, in social media and games) created a positive environment for embracing crypto. According to a 2021 survey, nearly 50% of Koreans in their 30s are crypto investors.

In addition, South Korea is home to several vibrant crypto platforms, including Upbit, Bithumb, and HTX.

Thus, 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, the European Central Bank President Christine Lagarde stated that Bitcoin is unfit for the ECB reserve due to its lack of safety and liquidity.

Japanese authorities rejected Bitcoin as it does not align with their national reserve strategy, citing price volatility and its incompatibility with existing financial frameworks as reasons. The Swiss central bank expressed similar concerns, with SNB President Martin Schlegel labeling crypto as “a niche phenomenon” and stating that high volatility and low liquidity block Bitcoin from becoming a reserve asset.

Crypto advocates argue that officials in these countries may simply not understand Bitcoin and its potential benefits in the national treasury.

An example of such misunderstanding can be seen with the Australian Reserve Bank governor Michele Bullock, who claimed she did not understand Bitcoin and did not see a role for it in the Australian economy or payment system.

Some Bitcoin proponents suggest that countries like South Korea may be avoiding Bitcoin at an inopportune time, comparing it to “shorting the Internet in 2000” when the potential for growth was massive.

> Betting against $BTC in 2025 feels like shorting the internet in 2000. Bold move. — MonteDev (@TheMonteDev) March 18, 2025

Interestingly, the anticipated creation of the U.S. Strategic Bitcoin Reserve did not ignite the crypto market or initiate an immediate global chain reaction. Michael Saylor’s insights on the importance of Bitcoin for leading countries resonate with some; however, many conservative central bank officials globally do not align with these views, as they have strict criteria for reserve assets, which Bitcoin does not meet. This positions governments like the U.S. as risk-takers, with time revealing which approach proves justified.

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