Central Bank

South Korea Dismisses Establishing Strategic Bitcoin Reserve

Published

4 days ago

March 18, 2025

The Bank of Korea (BOK) has dismissed the possibility of establishing a strategic bitcoin reserve, citing concerns over price volatility and risks. This comes despite ongoing global discussions about using bitcoin as part of foreign exchange reserves following the United States plans to create a reserve.

In response to an inquiry from a member of the National Assembly’s Strategy and Finance Committee, the central bank rejected adding bitcoin to its reserves. BOK officials emphasized bitcoin’s wild price swings as a key deterrent, stating that transaction costs to convert bitcoin to cash “could rise drastically” if the market experiences instability.

As of March 17th, bitcoin trades around $83,500, having fallen 23% from its peak of $108,000 in January. The BOK warned that this extreme volatility poses significant risks to its reserves.

The bank also indicated that bitcoin fails to meet the International Monetary Fund’s (IMF) criteria for reserve assets. The IMF calls for prudent management of liquidity, market, and credit risks for reserves – standards bitcoin does not currently satisfy in the eyes of the BOK.

This latest stance marks the first time the South Korean central bank has directly addressed the possibility of using bitcoin as a reserve asset. It emphasized a “cautious approach” regarding bitcoin.

The dismissal of a strategic bitcoin reserve comes despite growing attention on crypto’s potential role in reserves globally. Earlier in March, U.S. President Donald Trump signed an executive order to establish a strategic bitcoin reserve. This fueled discussions in South Korea and other Asian nations about following suit.

Source link

Bitcoin

Top 6 Important Fed Decisions To Know After SEC Drops Ripple Lawsuit Appeal

Published

20 hours ago

March 21, 2025

admin

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Este artículo también está disponible en español.

The crypto industry received a significant legal victory as Ripple CEO Brad Garlinghouse announced on March 19 that the U.S. Securities and Exchange Commission (SEC) had officially dropped its appeal against the company. The announcement came in a video posted on social media platform X, where Garlinghouse noted the regulatory agency’s decision to end its pursuit of further litigation.

Besides this interesting development, another major financial development has taken center stage in the crypto market in the past 24 hours; the outcome of the Federal Reserve’s latest meeting.

Fed Keeps Interest Rates Steady Amid Uncertainty

The outcome of the latest Fed meeting can be divided into six key decisions. First, the Federal Reserve opted to maintain interest rates at their current level, keeping the borrowing rate in a range between 4.25% and 4.5% for the second consecutive meeting. This decision is part of a continued pause in the Fed’s tightening cycle.

Secondly, the Fed noted that uncertainty surrounding the economy has increased, and third, the Fed’s updated projections were the shift in expectations for rate cuts in 2025. The median forecast suggests 50 basis points of cuts for the year, but a growing number of Fed officials are less convinced that rate reductions will be necessary. In December, only one official anticipated no rate cuts in 2025. However, there’s now a more divided outlook, and that number has now risen to four, as noted in a post on social media platform X by analysts at The Kobeissi Letter.

Beyond interest rates, the Fed revised its economic growth projections downward for 2025, suggesting that policymakers see slower expansion ahead. This adjustment comes alongside an increase in the Fed’s inflation forecast for the same period, reflecting concerns about price pressures persisting longer than previously anticipated. With inflation remaining a key focus, the central bank is treading carefully as it evaluates the right time to pivot toward a looser monetary stance.

Fourthly, the Fed announced that it would slow the pace of its balance sheet runoff beginning in April. This is alongside a sharp reduction in the Fed’s 2025 growth projections and a markup in their 2025 inflation forecast.

Implications For Crypto Markets And Digital Assets

For the crypto industry, the Fed’s decision to hold rates steady and its mixed messaging on future cuts introduce a dynamic situation to Bitcoin and others. The fact that the Fed is still concerned about inflation and economic uncertainty shows that the path to more accommodative policies regarding the crypto industry may not be as smooth.

However, if the Fed stays hesitant to cut rates and economic growth slows as projected, digital assets may face headwinds later in the year, which may slow down the predicted growth by crypto analysts.

Featured image from Unsplash, chart from Tradingview.com

Source link

Bitcoin strategic reserve

Czech Central Bank Head Wants To Buy Bitcoin With 5% Reserve Allocation

Published

2 months ago

February 3, 2025

admin

The Czech National Bank (CNB) is contemplating a groundbreaking shift in its investment strategy by considering the allocation of up to 5% of its reserves into Bitcoin. This potential move, led by Governor Aleš Michl, could position the CNB as the first major central bank in the West to hold digital assets.

BREAKING: Czech National Bank governor says #Bitcoin “has zero correlation to bonds and is an interesting asset for a large portfolio.”
“Worth considering.” pic.twitter.com/PqwlWEbpGy
— Bitcoin Magazine (@BitcoinMagazine) January 29, 2025

Key Takeaways

The CNB may invest up to 5% of its €140 billion ($146.13 billion) reserves in Bitcoin.
Governor Michl emphasizes Bitcoin’s potential for diversification despite its volatility.
The proposal is set to be presented to the bank’s board for approval on January 30, 2025.

A Shift Towards Bitcoin

Governor Aleš Michl has expressed a desire to diversify the CNB’s asset portfolio, highlighting Bitcoin as a viable option. In an interview, he stated, “For the diversification of our assets, Bitcoin seems good.” This statement reflects a growing trend among financial institutions to explore BTC as an alternative investment.

The proposed investment could amount to approximately €7 billion ($7.3 billion) in Bitcoin, which would surpass the CNB’s current gold holdings of €4.3 billion. If approved, this allocation would represent a significant shift from traditional reserve assets, which typically include gold and U.S. dollars.

The Rationale Behind the Proposal

Several factors are driving the CNB’s consideration of Bitcoin:

Increasing Institutional Interest: The launch of Bitcoin exchange-traded funds (ETFs) by major asset managers like BlackRock has sparked renewed interest in Bitcoin as a legitimate investment.
Diversification Strategy: Michl believes that Bitcoin’s low correlation with traditional assets like bonds makes it an attractive option for diversifying the bank’s reserves.
Changing Regulatory Landscape: The recent regulatory changes in the U.S., particularly under President Donald Trump, have created a more favorable environment for cryptocurrencies, further encouraging the CNB’s exploration of Bitcoin.

Risks and Considerations

Despite the potential benefits, Michl acknowledges the inherent volatility risks associated with investing in Bitcoin. However, he remains optimistic about its long-term value, stating, “It’s possible to have a big range of outcomes, that Bitcoin will have a value of zero or an absolutely fantastic value.”

The CNB’s board will need to conduct a thorough analysis before making a final decision. Michl emphasized the importance of thoughtful consideration, stating, “The bank board decides, and no decision is imminent.”

Conclusion

The Czech National Bank’s potential move to invest in Bitcoin marks a significant moment in the evolution of central banking. If approved, this decision could pave the way for other central banks to follow suit, reflecting a broader acceptance of digital assets in the financial landscape. As the CNB prepares to present its proposal, the world watches closely to see if this bold step will redefine the role of Bitcoin in national reserves.

Source link