The Bank of Korea has stated that it is taking a "cautious approach" toward the possibility of including Bitcoin as part of its foreign exchange reserves.

In response to a written inquiry on March 16, officials from the central bank explained that they have not considered adding Bitcoin as a reserve asset, citing its high price volatility.

In their reply to Representative Cha Gyu-geun of the National Assembly’s Planning and Finance Committee, central bank officials confirmed that they have neither discussed nor evaluated the inclusion of Bitcoin in their foreign exchange reserves. They emphasized the need for a careful approach, according to the Korea Herald.

The central bank highlighted that Bitcoin’s price volatility is extremely high, and in the event of instability in the cryptocurrency market, the cost of converting Bitcoin into cash could increase significantly.

Bitcoin's price has fluctuated dramatically over the past 30 days, ranging from $98,000 to $76,000, before stabilizing at around $83,000, marking a 15% drop since February 16, according to CoinGecko.

The BOK's stance has been made clear within recent dialogues, where questions regarding the adoption of Bitcoin as a national reserve have arisen. The Bank of Korea has publicly stated that they have not, and are not currently reviewing the possibility of the inclusion of bitcoin into their foreign exchange reserves.  

This decision also comes at a time when South Korea is navigating a complex landscape of evolving cryptocurrency regulations. While the country is a significant player in the global cryptocurrency market, its financial authorities remain focused on mitigating potential risks and ensuring the stability of the financial system.