Jeonbuk Bank has begun offering loans denominated in South Korean won and secured by bitcoin, making it the first bank in South Korea to provide the service, according to reporting by Bitcoin Magazine based on an exclusive report from South Korean newspaper Edaily.
A corporate lending product backed by bitcoin
The new facility is initially available only to corporate borrowers seeking working capital. Bitcoin is currently the sole digital asset accepted as collateral. Jeonbuk Bank said the offering could be broadened if regulatory conditions and market demand support an expansion.
The product does not involve the bank taking possession of the underlying coins. Instead, the bitcoin must be held by a specialized custodian. Eligible custodians are limited to virtual asset service providers registered under South Korea’s Act on the Reporting of Specific Financial Information.
That structure separates the bank’s lending activity from direct custody of virtual assets. If a borrower fails to repay, Jeonbuk Bank will not take ownership of the bitcoin. The collateral would instead be liquidated through enforcement procedures, including a court-ordered sale, with the proceeds used to recover the outstanding loan.
How Jeonbuk Bank assesses the collateral
The bank said bitcoin was selected because it has the largest market capitalization and trading volume among digital assets. It also said its internal stress tests indicated that bitcoin could continue to function as collateral even during substantial price declines.
For valuation purposes, Jeonbuk Bank uses an index calculated from a weighted average of prices on multiple global exchanges. Using a multi-exchange reference is intended to provide the basis for determining the value of the collateral rather than relying on a single trading venue.
Jeonbuk Bank is a subsidiary of JB Financial Group. The launch is the first tangible outcome of the “Crypto Bank” vision presented by President Park Chun-won. The lender is also South Korea’s only regional bank providing real-name verified accounts to cryptocurrency exchanges, and it is preparing an “all-in-one wallet” combining fiat-money accounts with digital-asset wallets.
Jeong Sang-hoon, the bank’s executive vice president in charge of its digital division, said the loan product was designed to use existing banking, collateral-management and recovery systems without the institution directly holding virtual assets.
International context and current market picture
Bitcoin-backed credit is not limited to South Korea. JPMorgan Chase introduced bitcoin-backed loans for institutional clients in March, while Switzerland’s Sygnum Bank offers a comparable product.
Moneyiar market data at 10:09 on October 13, 2026, showed Bitcoin at $83,508.35, up 0.12% over 24 hours but down 2.90% over seven days. Other tracked assets were weaker: Aethir was $0.005993, down 8.18% in 24 hours and 17.80% over seven days; Comedian stood at $0.058667, down 5.25% and 13.21%, respectively; and RedStone was $0.157267, down 6.94% over 24 hours and 4.92% over seven days.
