South Korea Considers Bitcoin Reserves Amid US Policy Shift

South Korea is exploring the possibility of integrating Bitcoin into its national reserves, a move that comes in response to recent shifts in US cryptocurrency policy. This development was discussed at a forum held by the main opposition Democratic Party, where industry leaders and financial experts urged the government to take proactive measures to align with global cryptocurrency trends.

Kim Jong-seung, CEO of blockchain firm xCrypton, emphasized the need for a clear policy response from South Korea. He noted that if the US proceeds with holding Bitcoin as part of its reserves, South Korea must follow suit to remain competitive in the global financial landscape. This sentiment was echoed by Rep. Kim Min-seok, who leads the Democratic Party’s policy preparation committee, indicating that the party would reshape the country’s crypto regulations if it returns to power.

The forum also highlighted the importance of developing a won-backed stablecoin. Kim Jong-seung warned that without a domestic stablecoin, South Korea risks losing “monetary sovereignty” if USD-pegged stablecoins dominate the digital economy. Stablecoins, which maintain a fixed value by being pegged to traditional currencies or assets, could provide a stable alternative for trade transactions.

Economics professor Seo Eun-sook of Sangmyung University and business management professor Kang Hyoung-goo of Hanyang University both emphasized the urgency of aligning South Korea’s financial policies with global trends. They proposed that a stablecoin backed by South Korean government bonds could enhance financial stability and attract more foreign investment. Kang noted that the absence of an offshore won market is one of the main barriers preventing South Korea from joining the MSCI Developed Markets Index, and a government-backed stablecoin could help address this issue.

The discussions in South Korea come at a critical time, as they occurred just before President Trump’s executive order for a national Bitcoin reserve. The Trump administration has not yet decided whether to sell other reserve assets like gold to acquire more Bitcoin, but the move signals a significant shift in US policy towards cryptocurrency.

Beyond the Bitcoin reserve strategy, the forum also addressed regulatory barriers in South Korea’s crypto sector. Current regulations prevent non-residents from trading on South Korean cryptocurrency exchanges, pushing domestic traders to offshore platforms. This outflow of domestic capital is a concern for many industry leaders, who believe that more inclusive regulations could help South Korea remain competitive in the global cryptocurrency market.

In summary, South Korea