Jeonbuk Bank launches Bitcoin-backed loans for corporate clients

Jeonbuk Bank has started issuing loans secured by Bitcoin to corporate clients in South Korea. The bank, which is part of JB Financial Group, provides the financing in Korean won and restricts use of the proceeds to business operating costs.

Jeonbuk Bank confirmed to local outlet Jaekyung Ilbo that at least one loan has reportedly already been executed. Bitcoin is currently the only digital asset accepted as collateral.

Bitcoin remains with a third-party custodian

Jeonbuk Bank does not hold the pledged Bitcoin directly. The collateral is kept by a registered crypto service provider while the bank issues the loan.

If the borrower defaults, the bank would seek repayment through a court-ordered sale of the pledged Bitcoin. The structure relies on revised Civil Enforcement Rules that took effect on 1 October 2026 and define procedures for seizing and selling rights connected with digital assets.

Bank tested collateral performance during sharp price falls

Before launching the product, Jeonbuk Bank conducted stress tests to assess how Bitcoin collateral would behave during significant market declines. The bank selected Bitcoin because of its deep liquidity and the ability to sell the asset if collateral enforcement becomes necessary.

During product development, the bank also reviewed loan-to-value ratios and margin-call thresholds for major cryptoassets, including Bitcoin and Ether. Interest rates, borrowing limits and detailed collateral requirements have not been disclosed.

Crypto-backed lending enters South Korea's banking sector

The launch follows a commitment made earlier in 2026 by Jeonbuk Bank CEO Park Chun-won to introduce a crypto-backed lending product. The service is currently available only to corporate customers.

The bank has indicated that the scope of the product may change depending on market demand and developments in South Korea's crypto regulation.

Loans are intended for business operating costs

The product places Bitcoin-backed lending within a traditional corporate credit structure rather than limiting its use to crypto trading. Borrowers receive Korean won and may use the funds for operating expenses.

The revised enforcement rules provide lenders with a defined legal route for recovering pledged cryptoassets. Combined with external custody, the model allows Jeonbuk Bank to lend against Bitcoin without holding the asset directly on its own balance sheet.