Jeonbuk Bank Launches Bitcoin-Backed Corporate Won Loans

Jeonbuk Bank has launched South Korea’s first bank loan program linked to digital assets, allowing corporate customers to borrow Korean won against Bitcoin (BTC) collateral.

The initial program is limited to businesses and can be used only for operating funds. Bitcoin is the sole eligible collateral under the structure.

Jeonbuk Bank, an affiliate of JB Financial Group, will not directly hold or manage the pledged assets. A qualified virtual asset service provider will provide custody instead, separating the bank’s lending activity from direct cryptoasset management.

If a borrower defaults, the bank will not take ownership of the Bitcoin. The collateral will be converted into funds through court auctions and other procedures under revised civil enforcement rules, allowing the bank to recover its claim.

Jeonbuk Bank has completed stress testing for the product and established a valuation method based on weighted average prices from multiple global exchanges. The structure gives South Korean businesses a way to use Bitcoin holdings in a bank-credit arrangement while keeping custody and liquidation outside the bank itself.