Jeonbuk Bitcoin EN
In South Korea, Bitcoin as bank collateral is no longer a hypothesis. Jeonbuk Bank, a regional lender controlled by JB Financial Group, has started granting won-denominated loans to businesses while accepting bitcoin as collateral, according to a report published on 12 October by the daily Edaily and picked up by Bitcoin Magazine, Cointelegraph and Unchained. It is the first reported case in the South Korean banking system, and a bank representative confirmed to local media that one loan has already been disbursed, without naming the borrower. The amount, the interest rate and the loan-to-value ratio have not been disclosed.
We were unable to read Edaily's article directly, as the page was not accessible to our tools: we report it through the three outlets that cite it. In the sources we found, the bank has not published any statement on the transaction, and Cointelegraph writes that it had received no reply from JB Financial Group at the time of publication.
How Jeonbuk Bank's loan works
The model described by the sources has four features. The loans are reserved for businesses, for working capital. Bitcoin is the only crypto-asset accepted: according to Bitcoin Magazine, the bank pointed to its market capitalisation and trading volumes, the highest among digital assets, and to stress tests showing that its value held up through sharp price drops. The collateral is valued using an index based on the weighted average of prices across several global exchanges. Above all, the bank neither owns nor controls the bitcoin: it is held by a specialised custodian, which must be a crypto-asset service provider registered under Korea's financial transaction reporting law. The custodian's name has not been disclosed.
If the business fails to repay, the bank does not take the bitcoin: it has them sold through enforcement procedures, such as a court-ordered sale, and recovers its money from the proceeds. Jeong Sang-hoon, executive vice president of the digital division, explained that the structure makes it possible to use existing credit and collateral systems "without directly holding virtual assets" (our translation), and according to TechM, cited by Unchained, the loan falls within ordinary banking business under the Banking Act, with no regulatory sandbox exemption involved. It is the first concrete result of chief executive Park Chun-won's "Crypto Bank" project, and the bank is considering extending the service depending on regulation and demand.
The key: new rules on compulsory enforcement
The step that makes the model possible is judicial. On 2 July, the Korean Supreme Court published a notice amending the rules on civil enforcement, open for comments until 11 August, to introduce specific procedures for seizing and liquidating crypto-assets, according to The Block and Herald Corporation. Under a seizure order, the exchange must transfer the assets to the court enforcement officer, who can sell them through a dedicated account with a service provider or entrust the sale to that provider; thinly traded crypto-assets can first be converted into more liquid assets, such as bitcoin. The amendments took effect on 1 October, according to Cointelegraph and Unchained.
The change matters because no Korean law explicitly prohibits crypto-asset collateral, but the 2017–2018 crackdown had effectively shut financial institutions out of this type of lending, Unchained recalls. Back in July, Herald reported that several banks, including Jeonbuk Bank, were exploring similar products, and quoted a cautious lawyer: the new rules are a positive signal for compliance, but enforcement remains difficult for assets held in self-custodied wallets or with global custodians.
[Image] The three roles in Jeonbuk Bank's Bitcoin-backed loan: lending, custody and court-led recovery
What we don't know
Many decisive details are missing. The loan amount, the rate, the loan-to-value ratio, the thresholds that would trigger a top-up or a sale, the name of the custodian and that of the company that received the loan are not public. Even confirmation of the disbursement comes second-hand: a bank representative gave it to Chosun according to Cointelegraph, and to Jaekyung Ilbo according to Unchained, while Bitcoin Magazine only writes that the bank has started offering the loans. Until contractual documents or a statement emerge, this is a reported transaction, not one verified in its details.
Not an isolated case
Elsewhere, major banks are moving in the same direction. In October 2025, JPMorgan announced, according to Bloomberg as cited by The Block, that it would accept bitcoin and ether as collateral for institutional clients; Bitcoin Magazine writes that the service went live in March 2026 and also mentions Switzerland's Sygnum. Herald reports an estimate, attributed to an SVB report, putting the global crypto-backed lending market at $67 billion, up 49% in one year.
For companies holding bitcoin, the choice is between selling and borrowing. Miner MARA pledged half of its bitcoin for a 750 million financing, while other companies chose to sell, such as Strategy with 1,638 bitcoin and Hyperscale Data with 685 bitcoin for a data centre. Meanwhile, Korea is rethinking the relationship between traditional money and digital assets on other fronts too, as shown by the Bank of Korea's study of how dollar stablecoins reach the foreign exchange market.
[Image] Timeline of Bitcoin as bank collateral across South Korea, the United States and Italy, from 2017 to 12 October 2026
And in Italy?
The comparison with the Italian debate is instructive. At the end of September, lawyer Antonio Di Giorgio, speaking at an event at the Italian Chamber of Deputies, proposed classifying Bitcoin as an asset under the Italian Civil Code and regulating its delivery and priority, so that Bitcoin-backed financing becomes possible. In Korea, the knot was untied from another side, with judicial rules on how to seize and sell the assets, and with a custodian separate from the bank. It is our reading that the Korean model resembles a solution already provided for in the Italian Civil Code, delivery of the asset to a third party designated by the parties: for Bitcoin, that third party is the custodian, who controls the keys, as we explain in our guide to cryptocurrency custody. The decisive step in Korea was clarifying how to turn the collateral into cash when the borrower doesn't pay: it is the same kind of certainty the Italian proposal seeks on delivery and priority.
Jeonbuk Bank and Bitcoin at a glance
What is confirmed, what isn't
- Reported: won loans to businesses only, secured only by bitcoin, with a registered external custodian and a court-ordered sale in case of default; one loan already disbursed, according to a bank representative; new civil enforcement rules in force since 1 October.
- Not disclosed: amount, rate, loan-to-value ratio, names of the custodian and the borrower; no official statement from the bank.
- To watch: other Korean banks, any extension to other clients and assets, the first court-ordered sale under the new rules, the Italian debate on the Civil Code proposal.
The bigger picture
The most interesting point of the Korean case is not that a bank accepts Bitcoin, but how it does so. Lending, custody and recovery are three separate activities, entrusted to three different parties: the bank lends and assesses, a registered custodian holds the keys, the court sells if something goes wrong. It is our reading that this very separation makes the model replicable by other banks, because none of them needs to learn how to custody crypto-assets in order to accept them as collateral.
The signals to watch are concrete: whether other Korean banks follow, whether Jeonbuk Bank extends the service to other clients or other assets, how the first court-ordered sale under the new rules plays out, and whether the Italian proposal for a Civil Code provision makes progress. For now, Korea has a transaction reported as done, Italy has a legal discussion, and the difference comes down to clear rules on how to enforce the collateral.
