- Jeonbuk Bank launched Bitcoin-backed loans on October 12, 2026, allowing corporate clients to borrow Korean won against BTC collateral.
- Approved custodians will safeguard pledged Bitcoin, while the bank uses prices from multiple global exchanges to value collateral.
- Defaulted Bitcoin collateral requires court approval for public auction, under South Korea’s revised Civil Execution Rules.
South Korea’s Jeonbuk Bank launched a Bitcoin-backed loan program on October 12, 2026, allowing businesses to borrow Korean won using BTC as collateral. According to Edaily, the service initially targets corporate clients, with expansion depending on demand and regulatory developments. The bank will rely on approved external custodians to hold Bitcoin pledged against the loans.
Jeonbuk Bank Restricts Bitcoin Loans to Businesses
The program marks a step toward CEO Park Choon-won’s vision of developing a “crypto bank.” Initially, only registered corporate customers can apply, and Bitcoin remains the only eligible collateral.
Borrowers can use the funds for payroll, supplier payments, and other operating expenses. However, individual customers cannot access the service, and borrowers cannot use the money for cryptocurrency speculation.
Jeonbuk Bank selected Bitcoin because it has the largest market capitalization and trading volume among cryptocurrencies. The bank also tested its performance as collateral during sharp price declines.
Jeong Sang-hoon, the bank’s vice president of the Digital Division, said the lender would strengthen its digital asset financial capabilities as laws and regulations change.
External Custodians Will Hold the Bitcoin
Jeonbuk Bank will not directly hold or manage the Bitcoin pledged by borrowers. Instead, approved custody providers will safeguard the assets under South Korean security and regulatory requirements.
These providers must obtain Information Security Management System (ISMS) certification and comply with the Virtual Asset User Protection Act. Meanwhile, the bank will calculate collateral values using weighted average prices from multiple global exchanges to reduce the influence of sharp price swings on individual platforms.
Court Approval Required to Sell Defaulted Collateral
The program also establishes procedures for recovering unpaid loans. If a business defaults, Jeonbuk Bank cannot immediately seize and sell the pledged Bitcoin.
Under South Korea’s revised Civil Execution Rules, which took effect October 1, 2026, the bank must obtain a court order before selling collateral through a public auction. Proceeds can then go toward recovering the outstanding debt.
Jeonbuk Bank, a subsidiary of JB Financial Group, plans to assess demand and regulatory developments before expanding the service. JPMorgan Chase and Swiss bank Sygnum have also introduced Bitcoin-backed lending services. Clarify the launch and first claimTighten the opening paragraph
