Jeonbuk Bank issues South Korea's first Bitcoin-backed corporate loan
Regional lender Jeonbuk Bank has extended South Korea's first won-denominated corporate loan secured by Bitcoin, utilizing registered third-party custodians and court liquidation procedures to avoid holding digital assets directly.
Jeonbuk Bank, a regional South Korean commercial lender under JB Financial Group, has issued a won-denominated corporate loan backed by Bitcoin collateral, local outlet Edaily reported on Oct. 12. The transaction marks the first traditional bank credit facility secured by cryptocurrency in South Korea. A bank spokesperson confirmed to Jaekyung Ilbo that a loan had been issued, although the borrower's identity, the date of issuance, and the loan amount were not disclosed.[3][1][4][5]
Under the loan's operational structure, Jeonbuk Bank avoids directly holding, possessing, or controlling the cryptocurrency. The pledged Bitcoin is stored with a third-party custodian that is registered as a virtual asset service provider under South Korea's financial reporting framework. If a borrower defaults, the bank will not take ownership of the coins. Instead, it will recover funds via court-ordered sales under the Supreme Court of Korea's amended Civil Enforcement Rules, which took effect Oct. 1 to regulate the seizure and liquidation of virtual assets.[3][1][2][6]
The loan program is currently limited to corporate customers, accepts only Bitcoin as collateral, and restricts borrowed capital to business operating funds. TechM reported that terms such as loan-to-value ratios, interest rates, and loan sizes have not been made public. Jeong Sang-hoon, executive vice president of Jeonbuk Bank's digital division, stated that the product was designed to fit into standard lending and collateral workflows without direct crypto exposure. The rollout serves as the initial offering of CEO Park Chun-won's 'Crypto Bank' strategy, with the lender planning to assess potential expansions depending on demand and regulatory shifts.[3][7][8]
Key facts
- Jeonbuk Bank issued South Korea's first won-denominated corporate loan backed by Bitcoin collateral.
- A bank spokesperson confirmed the loan took place, but borrower details, loan date, and credit size remain undisclosed.
- Pledged Bitcoin is stored with a registered third-party custodian, ensuring the bank neither owns nor directly controls the digital assets.
- In default scenarios, the bank recovers funds through court-ordered liquidation sales governed by the amended Civil Enforcement Rules enacted Oct. 1.
- Loan proceeds are restricted strictly to business operating expenses, and the service is open exclusively to corporate clients.
- The loan represents the first product under CEO Park Chun-won's 'Crypto Bank' initiative, with broader offerings contingent on market demand and regulatory developments.
Sources · 8 sources
- CO
CoindeskArticle ·
South Korea just got its first traditional bank loans backed by bitcoin Loans use third-party custodians for bitcoin holdings and rely on court-ordered sales if borrowers default.
Open source - LS
Laura Shin@laurashinPost on X ·
Jeonbuk Bank has made a won loan secured by Bitcoin to a corporate borrower. The BTC stays with a registered custodian, and on default it would be sold under a court order rather than handed to the bank. https://t.co/JO2Mffz59b
Open source - UN
UnchainedArticle ·
South Korea’s Jeonbuk Bank Lends Won Against Bitcoin, Using Court Sales for Defaults Jeonbuk Bank , a regional South Korean lender, has extended a corporate loan in won secured by Bitcoin , under a setup in which the bank never takes possession of the coins, even if the borrower defaults. Local outlet Edaily first reported the loan on Oct. 12, describing it as the first of its kind from a South Korean bank. A Jeonbuk Bank spokesperson confirmed to Jaekyung Ilbo that a loan had actually been made but said the borrower could not be disclosed. The bank, a unit of JB Financial Group , has not published a press release or filing on the product, or the date the loan was made. Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . How the Loan Works For now, the product is open only to corporate customers, accepts only Bitcoin as collateral and limits the proceeds to business operating funds, according to the reports. The pledged BTC sits with a third-party custodian, and the bank has neither ownership of it nor direct control over it. The bank has restricted the custodian role to virtual asset service providers registered under Korea’s financial reporting law. If a borrower defaults, the bank would not receive the Bitcoin. It would instead convert the collateral to cash through court enforcement, such as a sale order, and repay itself from the proceeds. That route depends on the Supreme Court of Korea’s amended Civil Enforcement Rules , which the outlets said took effect Oct. 1 and set procedures for seizing and liquidating virtual assets. The bank values the collateral with its own multi-exchange price benchmark and stress-tested it against sharp Bitcoin price drops, according to Edaily. The loan was designed to use the bank’s existing lending and collateral systems “without directly holding virtual assets,” Jeong Sang-hoon, executive vice president of the bank’s digital division, said in Edaily’s English-language edition. Terms Not Disclosed The loan-to-value ratio , interest rate and loan size were not disclosed, TechM reported . A bank spokesperson told the outlet the loan fell within the lending business allowed under Korea’s Banking Act and had not received a regulatory sandbox designation. No Korean statute explicitly bars crypto as loan collateral, but a 2017 to 2018 government crackdown included a ban on financial firms lending against virtual assets, which hardened into a de facto rule, according to Jaekyung Ilbo. Edaily and Jaekyung Ilbo reported that the bank plans to weigh widening the eligible collateral and services later, based on regulatory changes and demand. A ‘Crypto Bank’ Strategy The loan is the first product of CEO Park Chun-won’s “Crypto Bank” plan, according to Edaily. Park signaled crypto-collateral lending earlier this year. Edaily cited JPMorgan Chase and Switzerland’s Sygnum Bank as lenders already offering similar credit overseas. In June 2025, JPMorgan was reported to be planning to accept crypto ETFs as loan collateral , which involves fund shares rather than Bitcoin held directly. Related Listen: Bitcoin Reclaims Its Bear-Market Ceiling. Is the Rally Real? The post South Korea’s Jeonbuk Bank Lends Won Against Bitcoin, Using Court Sales for Defaults appeared first on Unchained .
Open source - CO
CoinMarketCap@CoinMarketCapPost on X ·
LATEST: 🏦 Jeonbuk Bank has become the first commercial bank in South Korea to accept Bitcoin as collateral for corporate loans, using a third-party custodian and new asset-seizure rules. https://t.co/yBHnNu1oAb
Open source - CT
Coin TelegraphArticle ·
South Korean bank launches Bitcoin-backed business loans: Report Jeonbuk Bank reportedly began offering Bitcoin-backed loans to corporate customers, with a third-party custodian holding the cryptocurrency used as collateral.
Open source - AI
Analytics Insight@analyticsinmePost on X ·
𝗦𝗼𝘂𝘁𝗵 𝗞𝗼𝗿𝗲𝗮’𝘀 𝗝𝗲𝗼𝗻𝗯𝘂𝗸 𝗕𝗮𝗻𝗸 𝗟𝗮𝘂𝗻𝗰𝗵𝗲𝘀 𝗙𝗶𝗿𝘀𝘁 𝗕𝗶𝘁𝗰𝗼𝗶𝗻-𝗕𝗮𝗰𝗸𝗲𝗱 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗟𝗼𝗮𝗻𝘀 South Korea’s Jeonbuk Bank has launched Bitcoin-backed business loans! 🇰🇷🏦 Corporate customers can now use BTC as collateral to borrow Korean won, with third-party custodians securing the assets. The service follows new court enforcement rules introduced on October 1. ₿💰 #Bitcoin #BTC #SouthKorea #CryptoLending #JeonbukBank #AnalyticsInsight #AnalyticsInsightMagazine Read More 👇 https://t.co/VoHYkleu2M
Open source - TB
The Block@TheBlockCoPost on X ·
NEW: South Korea's Jeonbuk Bank has started offering bitcoin-backed loans, according to Edaily news. The bank will initially accept only bitcoin as collateral for loans offered on a limited basis to corporate clients, and plans to expand the services depending on demand and regulatory developments. bitcoin:native
Open source - CN
crypto.news@cryptodotnewsPost on X ·
JUST IN: South Korea’s Jeonbuk Bank launches Bitcoin-backed loans for businesses The bank is starting with a limited corporate lending program that accepts only $BTC as collateral, with broader access dependent on customer demand and regulatory changes. https://t.co/s6HYLWqWU1
Open source