On October 12, 2026, the Bank of Korea in Jeonbuk launched South Korea's first Bitcoin-backed corporate loan program.
This line uses a weighted average price from multiple global exchanges to assess the value of Bitcoin collateral.
In the event of a loan default, approval from the court is required before selling the Bitcoin collateral, and it must be disposed of through a public auction.
Korea's Full North Bank has launched the country's first loan program that allows businesses to use Bitcoin as collateral to borrow Korean won. The program is initially aimed at business customers who need funds for operations, and the bank stated that in the future, it will consider expanding its scope based on regulatory changes and market demand.
Bank of North Korea limits Bitcoin loans to corporate customers
On October 12, 2026, the project was announced, marking a step forward in Governor Park Chun-won's ( Park Choon - won ) vision of building an "encrypted bank."
Currently, only registered corporate customers are eligible to apply, and this program only accepts Bitcoin as collateral. Borrowers can use the funds for operational expenses, including salary payments, payments to suppliers, and other operating costs. Individual customers are not able to utilize this loan service.
At the same time, retail customers are unable to use this service, and the funds cannot be used for cryptocurrency speculation.
Bank of North Korea chose Bitcoin because it has the largest market capitalization and trading volume among cryptocurrencies. The bank also successfully tested its performance as collateral during significant drops in Bitcoin prices.
Jeong Sang-hoon, the deputy head of the digital department at BNK, stated:
"We will continue to enhance our financial capabilities in digital assets to adapt to future changes in relevant laws and regulations."
Bitcoin is held by external custodian institutions.
BNP Paribas will not hold or directly manage the pledged Bitcoin. Instead, approved custodian institutions will be responsible for its custody, and these institutions must comply with South Korean safety and regulatory requirements.
These hosting institutions must hold certification for Information Security Management Systems ( ISMS ) and comply with the 'Virtual Assets User Protection Law'.
This line will also use the weighted average price from multiple global exchanges to calculate the collateral value of Bitcoin, in order to reduce the impact of sharp fluctuations in prices on a single trading platform.
The sale of mortgaged property requires court approval.
The project also has clear rules regarding loan default handling. If a company fails to repay the loan, the bank cannot directly take over the bitcoins and sell them.
According to the revised "Civil Enforcement Rules" that came into effect in South Korea on October 1, 2026, banks are required to obtain a court order before they can sell mortgaged assets through public auctions and recover unpaid debts.
This process adds another layer of supervision to the arrangement of this loan.
South Korea is not the only country exploring bitcoin mortgages. JPMorgan Chase and UBS have also launched similar lending services, indicating that the market's interest in using digital assets as collateral is on the rise.
