Jeonbuk Bank has begun offering corporate borrowers a loan structure denominated in won where Bitcoin holdings serve as the posted collateral — an arrangement that has no known equivalent among other lenders operating in the country. Launched on 12 October 2026, the programme carries the publicly stated goal of its chairman, Park Choon-won, of establishing what he has described as a "crypto bank," although at this point only registered corporate clients can participate and Bitcoin remains the one asset accepted as collateral.
At the outset, the programme targets businesses seeking operational financing, with any broadening of its scope tied to shifts in regulatory conditions and how market appetite develops. Loan proceeds may be directed toward a range of day-to-day operational needs, from staff wages and payments to suppliers through to broader running costs.
Those loans remain unavailable to borrowers in the private sector. Individual investors have no pathway into the product, and any money held within it is barred from flowing toward cryptocurrency trading.
Jeonbuk Bank pointed to Bitcoin's position at the top of the cryptocurrency market — both in terms of overall valuation and daily trading activity — as the basis for its choice. Stress-testing Bitcoin as loan collateral during periods of steep price decline was also part of the exercise.
Jeonbuk Bank's Digital Division vice president, Jeong Sang-hoon, noted that the institution plans to build out its digital asset financial capabilities in step with how relevant laws and regulations evolve. The pledged Bitcoin itself will remain outside the bank's direct custody or management, with custody resting with vetted providers that have satisfied the security and compliance standards set out under South Korea's regulatory framework.
Organisations operating in this space are required to carry Information Security Management System (ISMS) certification and adhere to the obligations set out under the Virtual Asset User Protection Act. For pricing Bitcoin as collateral, the bank plans to draw on a weighted average pulled from exchanges operating across multiple markets, a method intended to smooth out the distortions that sudden price movements on any single platform can create.
When a borrowing company defaults on its obligations, the lender holds no straightforward mechanism to seize and liquidate the Bitcoin held as collateral. Collateral liquidation through a court-authorised public auction became the mandated path for debt recovery once South Korea's amended Civil Execution Rules entered into force on 1 October 2026.
Other nations have been weighing Bitcoin-backed lending arrangements as well. Both JPMorgan Chase and Sygnum, the Swiss-based digital bank, have rolled out comparable programmes allowing clients to borrow against cryptocurrency holdings, a move that points to broadening appetite among financial institutions for collateral arrangements built around digital assets.
