Jeonbuk Bank Launches First Bitcoin-Backed Loans in South Korea

bitcoin-backed loans — Jeonbuk Bank has become the first bank in South Korea to offer won-denominated loans backed by bitcoin collateral, according to an exclusive report by Edaily on Monday, October 12.

The service, currently limited to corporate clients seeking working capital, marks a significant step in institutional crypto adoption within the country. The bank will not take custody of the bitcoin itself; instead, collateral will be held by a registered virtual asset service provider acting as a specialized custodian.

In the event of a default, the bank stated it would not seize the bitcoin but would liquidate the collateral through court-ordered procedures to recover the loan. The bank selected bitcoin due to its dominant market capitalization and liquidity, with stress tests reportedly showing it held up as viable collateral even during sharp price declines.

This initiative is the first tangible result of Jeonbuk Bank’s “Crypto Bank” strategy. The regional lender is already the sole provider of real-name verified accounts to crypto exchanges in South Korea and is developing an integrated fiat and digital asset wallet.