Jeonbuk Bank Launches Bitcoin-Backed Loans

What the bank is offering

Jeonbuk Bank has begun offering business loans that accept only bitcoin as collateral, with payouts in Korean won. The cash must be used strictly for operating expenses. An official told local media a loan has already been completed, but the client was not identified.

How custody and defaults work

The bank is not taking custody of the coins. A registered crypto service provider holds the assets while the bank originates the loan. If a borrower does not repay, the lender would seek to recover funds by petitioning the court to authorize a sale of the bitcoin. This process depends on the revised Civil Enforcement Rules, in force as of Oct. 1, which outline how to seize and sell rights tied to digital assets.

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Risk controls and product limits

Before launch, the bank ran internal stress tests to gauge how bitcoin holds up during sharp drawdowns, selecting BTC for its deep liquidity to allow cash conversion when needed. At the time of the report, bitcoin was shown at $82,267.88. Loan rates, maximum amounts and detailed collateral terms were not disclosed.