Jeonbuk Bank has introduced what it describes as South Korea’s first won-denominated loan secured by Bitcoin, starting with corporate borrowers. The new product allows companies to pledge Bitcoin as collateral while borrowing in local currency, marking another step in the bank’s broader push into digital-asset-related services.
The structure separates custody from lending. Jeonbuk Bank said it will not hold the pledged Bitcoin in its own wallet, instead leaving asset storage and management to a specialized licensed custodian while the bank focuses on valuing the collateral and extending the loan.
Corporate-only launch
At launch, the product is available only to corporate clients, and the loan proceeds are restricted to operating funds. The bank has not presented it as a general-purpose retail product, and its initial design keeps the scope narrow both in borrower type and in permitted use of funds.
Jeonbuk Bank said it sees the Bitcoin-backed won loan as a starting point. Any expansion in the range of eligible borrowers or related services is expected to depend on market demand and on future regulatory changes.
How the collateral is handled
Under the arrangement, the pledged Bitcoin is not kept by Jeonbuk Bank. A dedicated digital-asset custodian manages the collateral, while the bank handles only the assessment of collateral value and the lending function.
The custody setup is described as relying on a licensed operator with segregated storage and cold-wallet custody requirements. That framework is intended to separate customer assets from the bank’s own operations and place technical safekeeping with a specialist provider.
Valuation and default process
To price the Bitcoin posted as collateral, Jeonbuk Bank said it uses market data from multiple global exchanges together with volatility indicators. The stated purpose is to reduce the impact of sharp moves or distortions tied to any single trading venue.
If a borrower defaults, repayment and collateral recovery are to proceed through legal channels under revised civil enforcement rules. The process can include a court sale order that allows the pledged Bitcoin to be converted into cash, rather than the bank directly liquidating the asset on its own.
Part of a broader digital-asset strategy
The launch fits into Jeonbuk Bank’s wider expansion in digital-asset business lines. The bank has also been building services tied to real-name verified deposits and withdrawals for virtual-asset exchanges, linking traditional banking rails with parts of the local crypto market.
For now, the confirmed next step is evaluation rather than a broader rollout. Jeonbuk Bank said it will review whether to widen the borrower base and add services based on how demand develops and how the regulatory environment changes.
Source: en.bloomingbit.io