Jeonbuk Bank launches South Korea's first Bitcoin-backed corporate loans

On October 12, 2026, South Korea's Jeonbuk Bank launched the country's first won-denominated corporate loan secured by Bitcoin. Available exclusively to business clients for operating funds, the product utilizes third-party qualified custodians to hold collateral while Jeonbuk Bank oversees multi-exchange collateral valuation. Following civil enforcement rule revisions on October 1, 2026, default recoveries are processed through court-ordered sales, advancing Jeonbuk Bank's broader strategy to expand its digital asset banking footprint.

Features of the Bitcoin loan product

• ▪Jeonbuk Bank, a subsidiary of JB Financial Group, launched South Korea's first Korean won-denominated loan secured by Bitcoin on October 12, 2026
• ▪Jeonbuk Bank selected Bitcoin as the sole eligible collateral for its corporate loans due to Bitcoin's superior trading volume and liquidity relative to other virtual assets
• ▪Jeonbuk Bank's Bitcoin-backed loans are restricted to corporate clients, with proceeds designated strictly for business operating funds

Custodial management of collateral

• ▪Third-party custodians holding collateral for Jeonbuk Bank must comply with South Korea's Virtual Asset User Protection Act, ISMS certification, and segregated cold-wallet storage requirements
• ▪Jeonbuk Bank does not take custody, operate wallets, or take ownership of pledged Bitcoin, outsourcing collateral management to specialized digital-asset custodians

Valuation of Bitcoin collateral

• ▪Jeonbuk Bank calculates collateral value using weighted average prices drawn from multiple global exchanges rather than relying on a single pricing venue
• ▪Jeonbuk Bank's valuation model for Bitcoin collateral incorporates volatility indicators and stress tests to lessen the impact of sharp price swings on collateral assessments

Loan default and asset recovery

• ▪When a borrower defaults on a Bitcoin-backed loan, Jeonbuk Bank recovers its claim from court sale proceeds without taking direct possession of the digital assets
• ▪Under South Korea's revised Civil Execution Rules effective October 1, 2026, defaults on Bitcoin collateral trigger court-ordered sales to convert seized assets into cash

Jeonbuk Bank's digital asset strategy

• ▪Jeonbuk Bank's president expressed a goal for the institution to evolve into a crypto bank, drawing parallels to digital asset service models from institutions like JPMorgan Chase
• ▪Depending on market demand and regulatory changes, Jeonbuk Bank plans to evaluate expanding its loan offerings to additional digital assets and a broader client base
• ▪Jeonbuk Bank previously expanded its digital asset footprint by providing real-name verified deposit and withdrawal accounts to South Korean virtual asset exchanges

Debatable claims

• ▪Bitcoin is sufficiently stable to serve as commercial bank loan collateral
• ▪Commercial banks should restrict crypto-backed lending exclusively to Bitcoin