Bitcoin and gold illustration generated by ChatGPT DALL·E.

South Korea is beginning to grapple with the question of whether its government should hold virtual assets in its reserves, following U.S. President Donald Trump’s executive order designating Bitcoin as a strategic reserve asset. As the government gradually moves to permit corporate real-name accounts for virtual assets, the Democratic Party of Korea recently hosted a seminar to explore the possibility of including Bitcoin in the country’s foreign exchange reserves or investing in it through the National Pension Service.

However, financial and monetary experts remain skeptical. A ChosunBiz survey of 10 domestic experts found unanimous agreement that it is “premature” for South Korea to hold virtual assets as part of its foreign exchange reserves or pension fund.

According to political sources on Mar. 14, the Democratic Party of Korea held a seminar on Mar. 6 to discuss incorporating Bitcoin into foreign exchange reserves and exploring measures to support stablecoins.

Kim Byung-wook, the party’s deputy head, stated during the event that Trump’s decision to classify virtual assets as a strategic reserve asset “will have a considerable impact on South Korea.” Kim Jong-seung, CEO of Xcrypton, argued that the Bank of Korea and the Ministry of Economy and Finance should also assess the feasibility of adding Bitcoin to foreign exchange reserves, following the U.S. example.

Foreign exchange reserves serve as external liquidity buffers held by central banks or governments to address balance of payments imbalances or stabilize currency markets. These reserves typically consist of gold, foreign currencies, and financial instruments such as government bonds, agency securities, corporate bonds, stock funds, and cash-equivalent assets—prioritizing stability and safe assets denominated in major currencies.

Most South Korean financial experts interviewed by Chosun Biz contended that investing in Bitcoin contradicts the fundamental purpose of foreign exchange reserves.

Shin Se-don, an honorary professor of economics at Sookmyung Women’s University, dismissed the idea of using foreign exchange reserves to purchase Bitcoin as “nonsensical.” However, he acknowledged that discussion on the issue was warranted, noting that even the U.S. government is not actively investing in Bitcoin but is merely holding confiscated assets. Trump clarified on Mar. 7 that the federal government’s strategic Bitcoin reserves would be maintained through retained seized assets rather than new purchases.

Ha Joon-kyung, an economics professor at Hanyang University, similarly pointed out that Trump’s policy does not involve additional Bitcoin acquisitions by the U.S. government. He suggested that South Korea should focus on how to manage seized virtual assets, as the U.S. has done.

Other experts agreed that discussions on virtual assets should continue but cited significant hurdles, including the absence of clear legal definitions, regulatory frameworks, and designated oversight bodies.

Ahn Dong-hyun, an economics professor at Seoul National University, said, “Bitcoin has yet to be properly defined, making it unclear which laws and regulatory agencies should oversee it.” He added that South Korea’s regulatory stance has been inconsistent, further complicating the issue. Kim Jin-il, an economics professor at Korea University, stressed the importance of first determining whether Bitcoin should be classified as a commodity, currency, or asset before making policy decisions.

Shin Kwan-ho, an economics professor at Korea University, underscored the need for stability in foreign exchange reserves, stating, “Bitcoin, which lacks intrinsic value, is unsuitable.”

Most experts agreed that Bitcoin fulfills only one of the three core functions of money—a store of value—while failing to meet the criteria of a medium of exchange or a unit of account. Bitcoin’s price surged from 50 million won in January 2024 to 150 million won in January 2025 before stabilizing at around 120 million won.

Lee Bu-hyung, a director at Hyundai Research Institute, said the discussion remains hypothetical, as “virtual assets must first gain widespread acceptance in global payment systems.” Kim Jeong-sik, an honorary economics professor at Yonsei University, argued that Bitcoin’s price volatility and potential for illicit use make it unsuitable for foreign exchange reserves, sovereign wealth funds, or institutions such as the Korea Investment Corporation (KIC).