Switch to seedless. Get 30% off with SWITCH30 till Oct 21Jeonbuk Bank unveils Bitcoin-backed loans in South Korea
6.6 Banking Jeonbuk Bank offers South Korea’s first Bitcoin-backed won loans for corporate clients, using third-party custody and strict risk controls. Collateral is liquidated via court if borrowers default.
Jeonbuk Bank has launched South Korea’s first bank-issued won loans secured by Bitcoin, specifically targeting corporate clients in need of business operating funds. Rather than holding the Bitcoin collateral directly, the bank relies on qualified virtual asset service providers to custody the assets, ensuring compliance with local regulations and security standards. If the value of Bitcoin drops, the collateral value decreases accordingly. Borrowers may then face margin calls or be required to provide additional collateral. In the event of default, the bank initiates a court-supervised sale of the Bitcoin to recover the outstanding debt. Any surplus from the sale is returned to the borrower, while any shortfall remains the borrower’s responsibility. To manage risk, Jeonbuk Bank employs conservative loan-to-value ratios, regular stress tests, and a valuation system based on global exchange prices. This innovative product is currently available only to corporate borrowers, reflecting a cautious approach to integrating digital assets into traditional banking.
