Jeonbuk Bank of South Korea to Introduce Bitcoin Loans

Jeonbuk Bank has made history as the first financial institution in South Korea to introduce won-denominated loans secured by bitcoin.

As detailed in exclusive reporting published Monday by the domestic publication Edaily, this subsidiary of JB Financial Group has officially launched the lending service.

At present, availability is restricted to corporate clients seeking to raise working capital, with bitcoin serving as the sole acceptable form of collateral. The institution indicated that the offering might broaden depending on how regulations evolve and what market demand dictates.

Rather than retaining ownership or direct control over the underlying digital assets, Jeonbuk Bank ensures the collateral is safeguarded by a specialized custodian. These custodians are restricted to virtual asset service providers that maintain registration under South Korea’s Act on the Reporting of Specific Financial Information.

Should a borrower fail to repay, the lender will not seize the coins directly. Instead, it will liquidate the assets through legal enforcement methods—such as court-directed sales—and utilize the resulting funds to satisfy the debt.

The bank selected bitcoin for this initiative due to its dominant market capitalization and trading volume, which outpace all other digital assets. Internal stress testing demonstrated that bitcoin maintained its viability as collateral even amid severe market downturns. To determine collateral value, the institution relies on a pricing index derived from the weighted average of multiple global exchanges.

Comparable financial products are already active internationally. In March, JPMorgan Chase rolled out bitcoin-backed lending for institutional users, while Switzerland-based Sygnum Bank delivers similar credit solutions.

This loan program represents the initial tangible milestone stemming from the “Crypto Bank” strategy championed by Jeonbuk Bank President Park Chun-won. As the sole regional bank supplying real-name authenticated accounts to cryptocurrency exchanges, the lender is also developing an integrated “all-in-one wallet” that merges traditional fiat accounts with digital asset storage.

“This loan is an example of designing a risk management and recovery structure that allows us to utilize existing bank lending and collateral management systems without directly holding virtual assets,” said Jeong Sang-hoon, executive vice president of the bank’s digital division.