Jeonbuk Bank, a subsidiary of JB Financial Group, has launched South Korea's first won-denominated loans secured by Bitcoin collateral. The product became available to corporate clients on October 12, 2026.
The bank does not take direct custody of Bitcoin pledged as collateral. Instead, it partners with qualified virtual asset service providers that meet South Korea's custody standards, including ISMS certification and compliance with the Virtual Asset User Protection Act.
How the loans work
Jeonbuk Bank handles valuation and lending while licensed custodians manage the Bitcoin. The loans are restricted to corporate clients and intended for business operating funds, including payroll, supplier payments, and operational expenses.
Bitcoin was selected as the only acceptable collateral due to its liquidity and trading volume relative to other digital assets.
The bank uses a layered valuation process that draws weighted average prices from multiple global exchanges rather than relying on a single venue. The model factors in volatility medians and conducts stress tests.
In case of default, recovery proceeds through court-ordered auctions under revised Civil Execution Rules that took effect on October 1, 2026. The Bitcoin does not automatically transfer to the bank upon missed payments.
Future expansion
Jeonbuk Bank has indicated plans to expand the offering depending on market demand and regulatory developments. The bank's leadership has expressed interest in evolving the institution into a crypto bank. Future expansion could include opening the product to a wider range of clients and potentially accepting other digital assets.
