Jeonbuk Bank, a subsidiary of JB Financial Group, has introduced a new lending service for corporate clients in South Korea. The bank now accepts Bitcoin as collateral for loans denominated in the local currency, specifically targeting businesses that require operational capital.
The operational model involves a third-party custodian that manages the Bitcoin collateral. This structure allows the bank to recover funds in the event of a default through court-ordered sales of the assets, without the bank taking direct possession of the cryptocurrency.
This initiative follows recent amendments to South Korea’s Civil Enforcement Rules, which became effective on October 1. These legal changes provide the necessary framework for the seizure and liquidation of virtual assets, enabling the bank to manage risks associated with crypto-backed lending.
While the bank has confirmed that it has already issued at least one loan, specific details regarding interest rates, loan-to-value ratios, and total loan volumes remain undisclosed. The institution has not yet provided further comments on the program.
