Jeonbuk Bank in South Korea Launches First Bitcoin-Backed Loans for Corporations

Jeonbuk Bank in South Korea Launches Bitcoin-Backed Loans for Corporations

Jeonbuk Bank, a regional bank in South Korea under JB Financial Group, launched the country's first corporate loan program backed by Bitcoin (BTC) on October 12, 2026 (Monday).

JUST IN: 🇰🇷 South Korea's Jeonbuk Bank starts offering $BTC backed loans. https://t.co/HpjrLevNW2

--- Whale Insider (@WhaleInsider) October 12, 2026

The bank's initiative to accept cryptocurrency as collateral for loans is a first in South Korea. This program is seen as the first tangible outcome of the crypto bank concept promoted by the bank's president, Park Choong-won.

A System to Support Corporate Financing

The program targets corporate clients that require working capital for payroll, payments to suppliers, and daily operational expenses. The use of cryptocurrency for speculative purposes is prohibited, and individual customers are not eligible.

Companies can secure liquidity (fiat currency) without selling their Bitcoin holdings. This supports the cash flow of companies that wish to strategically hold Bitcoin (BTC) as a financial asset. Currently, the only cryptocurrency accepted as collateral is Bitcoin, which has the largest market capitalization and trading volume, ensuring market reliability. The bank is also considering expanding the range of accepted assets to include Ethereum (ETH) and developing services for individual customers in the future, depending on demand and regulatory conditions.

Secure Collateral Management by Specialized Custodians

To avoid the risks associated with directly holding and managing cryptocurrencies, the management of the collateral Bitcoin is entrusted to external specialized custodians, and Jeonbuk Bank itself does not hold private keys or wallets directly.

The custodians responsible for storing the collateral are limited to virtual asset service providers (VASP) registered under South Korea's Act on Reporting and Using Specified Financial Transaction Information. Furthermore, they must meet strict security compliance standards in accordance with the Virtual Asset User Protection Act, including:

**- Obtaining Information Security Management System (ISMS) certification

• Compliance with information notification obligations during transfers (Travel Rule)
• Strict rules for asset segregation management and cold wallet storage
• Insurance coverage and reserve fund maintenance**

Risk Management through Unique Evaluation Models and Court Procedures

To address rapid volatility (price fluctuations), Jeonbuk Bank has developed its own evaluation framework.

Instead of relying on the price from a single exchange, it calculates the collateral value using a transparent index that averages data from multiple global exchanges and considers the median of volatility indicators. Internal stress tests conducted in advance have proven that Bitcoin can function adequately as collateral even during market crashes. Additionally, if a borrower defaults, the bank will not unilaterally liquidate or seize the Bitcoin.

Under the revised Civil Execution Rules, which came into effect on October 1, 2026, a legal framework has been established to conduct liquidation (sale) through public auctions with a court order, allowing the bank to recover debts from the sale proceeds.

Global Trends and Jeonbuk Bank's Digital Strategy

The introduction of loans backed by cryptocurrencies is becoming a global trend, with institutions like JPMorgan Chase & Co. in the U.S. and Sygnum Bank in Switzerland offering similar services to institutional investors.

Jeonbuk Bank is the only regional bank in South Korea that has provided real-name verified won accounts to cryptocurrency exchanges. Currently, it is actively promoting the integration of existing financial systems with digital assets, including the development of an All-in-one wallet that combines fiat currency accounts and digital asset wallets.

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