Jeonbuk Bank Pioneers Bitcoin-Backed Corporate Loans in South Korea
Seoul, South Korea – October 12, 2026 – Jeonbuk Bank has launched South Korea’s inaugural loan program that allows businesses to secure Korean won financing by using Bitcoin as collateral. The initiative, unveiled today, initially targets corporate clients requiring capital for operational expenses, with potential future expansion contingent on regulatory developments and market demand.
The program, announced on October 12, 2026, represents a significant stride towards CEO Park Choon-won’s ambition to cultivate a “crypto bank.” Currently, only registered corporate customers are eligible to apply, and the facility exclusively accepts Bitcoin as collateral. Borrowers can utilize the secured funds for various business expenditures, including payroll, supplier payments, and other operational costs. Individual customers are not permitted to participate in this program.
The bank has opted for Bitcoin due to its substantial market capitalization and trading volume within the cryptocurrency landscape. Jeonbuk Bank also conducted successful tests to assess Bitcoin’s performance as collateral during periods of significant price volatility.
Jeong Sang-hoon, Vice President of Jeonbuk Bank’s Digital Division, stated, “We will continue to enhance our digital asset financial capabilities in line with future changes in relevant laws and regulations.”
Jeonbuk Bank will not directly hold or manage the pledged Bitcoin. Instead, the cryptocurrency will be entrusted to approved custody providers that adhere to South Korea’s stringent security and regulatory mandates. These providers must possess Information Security Management System (ISMS) certification and comply with the Virtual Asset User Protection Act.
To mitigate the impact of sharp price fluctuations on individual trading platforms, the bank will determine the collateral value of Bitcoin by calculating a weighted average price derived from multiple global exchanges.
The program also incorporates specific protocols for managing loan defaults. In instances where a business fails to repay its loan, Jeonbuk Bank cannot unilaterally seize and liquidate the Bitcoin collateral. Under South Korea’s revised Civil Execution Rules, which became effective on October 1, 2026, the bank is required to obtain a court order to proceed with the sale of the collateral through a public auction to recover the outstanding debt. This procedural step introduces an additional layer of oversight to the lending arrangement.
South Korea is not the sole nation exploring the potential of Bitcoin-backed loans. Global financial institutions such as JPMorgan Chase and Swiss bank Sygnum have also introduced comparable lending services, signaling a growing trend in the utilization of digital assets as collateral.
