REPORTED: based on EDaily and Aju News, citing industry sources, a named bank executive and a bank spokesperson. Jeonbuk Bank has not published a press release.
Jeonbuk Bank, part of South Korea’s JB Financial Group, “has become the first bank in South Korea to introduce won-denominated loans linked to digital assets,” the financial newspaper EDaily reported on 12 October [1]. Aju News reported the same, quoting a bank spokesperson [2].
For now the loans are narrow. According to EDaily, they are offered “on a limited basis exclusively to corporate customers for the purpose of raising working capital using Bitcoin” [1]. The bank plans to review whether to widen the service later, depending on regulation and demand, EDaily reported [1].
How the loan works
A company pledges Bitcoin as collateral and borrows Korean won. The key design choice, as reported, is that the bank never takes the Bitcoin itself.
- A custodian holds the coins. According to EDaily, “The Bitcoin used as collateral is held within the management system of a specialized custodian and management provider; Jeonbuk Bank does not hold ownership of the virtual assets themselves or have direct control over them” [1]. A custodian is a firm that stores digital assets for others. EDaily reported that the bank only accepts custodians registered as virtual asset service providers under Korean law [1]. The custodian has not been named.
- Bitcoin only, business use only. “For now, the eligible collateral is limited to Bitcoin, and the use of the loan proceeds is restricted to funds necessary for corporate business operations,” EDaily reported [1]. Aju reported the same limits [2].
- If the borrower defaults, a court sells the Bitcoin. South Korea’s amended Civil Enforcement Rules, which EDaily says “took effect on the 1st of this month” (1 October 2026), set out how claims to virtual assets can be seized and sold, including through sale orders [1]. Under Jeonbuk’s structure, “the bank does not directly receive the virtual assets but instead liquidates them through enforcement procedures, such as a court-ordered sale,” and repays the loan from the proceeds, EDaily reported [1]. In plain terms: the coins go from the custodian to a court-supervised sale, not into the bank’s wallet.
- How the Bitcoin is valued. To avoid one exchange’s price being distorted, the bank reportedly uses an index built from “a weighted average of prices from multiple global exchanges” together with the median of market volatility indicators as its reference price [1]. Aju reported that the bank also ran its own stress tests [2].
What the bank says
Jeong Sang-hoon, executive vice president of Jeonbuk Bank’s digital division, told EDaily: “This loan is an example of designing a risk management and recovery structure that allows us to utilize existing bank lending and collateral management systems without directly holding virtual assets, all within the framework of current laws and regulations” [1][3].
A bank spokesperson told Aju News the loan was handled “within the scope of lending business that a bank can conduct under the Banking Act,” and that the bank “did not receive a separate innovative financial service designation” [2] (TSN’s translation). That designation is South Korea’s regulatory sandbox, which lets firms try products current rules may not allow. In other words, the bank says it did not need special permission.
What is not known
- Who the custodian is.
- How much has been lent, to how many companies, at what interest rate, and how much can be borrowed against each Bitcoin (the loan-to-value ratio).
- What happens if Bitcoin’s price falls sharply before a default, for example whether borrowers must add collateral.
None of these has been reported, and the bank has not published product terms.
Separate note
Aju News also reported that, on the same day, Jeonbuk Bank’s mobile app 쏙뱅크 (Ssok Bank) began showing market data from five major Korean digital-asset exchanges, under a data deal with Bonanza Lab [2]. This is a separate information service and is not part of the loan product.
Sources
- EDaily (English), “[Exclusive] Jeonbuk Bank Launches First Bitcoin-Linked Loan in the Domestic Banking Sector”, Lee Jeong Hun, 12 October 2026. https://en.edaily.co.kr/news/eda202610115094/
- Aju News, “전북은행, 은행권 첫 비트코인 담보 원화대출 취급” (Jeonbuk Bank handles banking sector’s first Bitcoin-collateral won loan), 12 October 2026, 13:59 KST. https://www.ajunews.com/view/20261012135644637
- EDaily Marketin (Korean), “전북은행, 국내 은행권 최초 비트코인 연계 대출”, 12 October 2026. https://marketin.edaily.co.kr/News/ReadE?newsId=02384566645612264
