South Korean bank launches Bitcoin-backed business loans: Report

Jeonbuk Bank reportedly began offering Bitcoin-backed loans to corporate customers, with a third-party custodian holding the cryptocurrency used as collateral.

South Korea’s Jeonbuk Bank, a subsidiary of JB Financial Group, reportedly started issuing Bitcoin-backed loans to its corporate customers.

Local outlet EDaily reported Monday that Jeonbuk Bank became the country’s first commercial bank to accept Bitcoin (BTC) as collateral for won-denominated lending. The bank is reportedly limiting the service to businesses seeking operational capital, while a specialized custodian holds the BTC used as collateral. 

The lending arrangement follows amendments to South Korea’s Civil Enforcement Rules that took effect on Oct. 1. According to the Supreme Court, the rules establish procedures for seizing and liquidating claims to virtual assets. In the event of a default, the bank can recover its funds through court-ordered sales. 

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