Jeonbuk Bank, a subsidiary of JB Financial Group, has launched bitcoin-backed loans denominated in South Korean won. This initiative marks the first time a domestic bank in South Korea provides such a service. Currently, the offering is restricted to corporate clients seeking working capital, with bitcoin serving as the exclusive form of collateral.
The bank does not directly manage or hold the bitcoin collateral. Instead, assets are held by a specialized custodian registered under the Act on the Reporting of Specific Financial Information. In the event of a borrower default, the bank will not seize the coins directly but will initiate liquidation through court-ordered procedures to recover the loan amount.
To assess collateral value, the bank utilizes a weighted average price index derived from global exchanges. The institution selected bitcoin due to its significant market capitalization and trading volume. Internal stress tests conducted by the bank indicated that bitcoin remains a stable form of collateral even during periods of substantial price volatility.
This product aligns with the 'Crypto Bank' strategy introduced by bank president Park Chun-won. Jeonbuk Bank currently serves as the only regional lender providing real-name verified accounts to cryptocurrency exchanges. The institution is also developing an all-in-one wallet solution that integrates traditional fiat accounts with digital asset storage.
