Jeonbuk Bank has become the first South Korean bank to offer won loans backed by Bitcoin. The product is limited to corporate customers, and registered custodians hold the pledged coins. New court enforcement rules give the bank a route to recover unpaid loans.
Jeonbuk Bank has introduced the country's first bank-issued won loans backed by Bitcoin, letting corporate customers use their crypto holdings as collateral for business financing. According to an October 12 report by Edaily, the JB Financial Group subsidiary has started the service on a limited basis, and Bitcoin is the only accepted asset.
Borrowers must be companies seeking funds for business operations. Coinpedia reports that individual customers cannot access the loans and that the funds cannot be used for crypto speculation.
Registered custodians hold the Bitcoin
Customers pledge Bitcoin held by a specialist digital asset custodian, while the bank provides financing in Korean won without taking direct ownership or control of the cryptocurrency. Only virtual asset service providers registered under South Korea's financial transaction reporting legislation are eligible to hold the collateral.
Jeonbuk Bank chose Bitcoin after reviewing its liquidity, market size and suitability for collateral valuation. The bank also built its own valuation system, which uses a weighted index of prices from multiple global exchanges alongside a median measure of market volatility. The design aims to reduce reliance on any single exchange.
Court-ordered sales give the bank a recovery route
The product follows amendments to South Korea's civil enforcement rules that took effect on October 1. If a borrower defaults, Jeonbuk Bank can seek a court-ordered sale of the pledged cryptocurrency, and the proceeds would settle the outstanding loan.
Jung Sang-hoon, vice president of the bank's digital division, described the product as applying existing bank lending and collateral management systems to digital assets. The report did not disclose the interest rate, loan-to-value ratio, total lending volume or the identity of the custody provider.
Other lenders already offer similar products
In March 2026, JPMorgan Chase began accepting Bitcoin as collateral for loans to institutional clients through its Kinexys platform. Swiss digital asset bank Sygnum has also offered comparable cryptocurrency-backed lending.
Jeonbuk Bank now plans to review additional digital assets and loan purposes as it gains operating experience and regulations evolve.
Sources: crypto.news, Coinpedia Fintech News
Trading involves risk.
Risk Disclaimer
