Jeonbuk Bank has begun offering business loans that accept only bitcoin as collateral, with payouts in Korean won. The cash must be used strictly for operating expenses. An official told local media a loan has already been completed, but the client was not identified.
The bank is not taking custody of the coins. A registered crypto service provider holds the assets while the bank originates the loan. If a borrower does not repay, the lender would seek to recover funds by petitioning the court to authorize a sale of the bitcoin. This process depends on the revised Civil Enforcement Rules, in force as of Oct. 1, which outline how to seize and sell rights tied to digital assets.
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Before launch, the bank ran internal stress tests to gauge how bitcoin holds up during sharp drawdowns, selecting BTC for its deep liquidity to allow cash conversion when needed. At the time of the report, bitcoin was shown at $82,267.88. Loan rates, maximum amounts and detailed collateral terms were not disclosed.
According to Jaekyung Ilbo, during product development the bank reviewed LTV parameters and margin-call thresholds for top tokens such as bitcoin and ether. The move brings a local bank's offer in line with a broader shift toward bitcoin-backed lending as a more mainstream form of credit.
Jeonbuk Bank said it could expand the service based on customer demand and any changes to crypto regulations. The rollout follows CEO Park Chun-won saying earlier this year the lender would introduce the country's first crypto-backed loan. For companies holding bitcoin, this is a new way to turn it into won for day-to-day needs, bounded by liquidity, legal guardrails and risk checks.
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