South Korea just got its first traditional bank loans backed by bitcoin
Loans use third-party custodians for bitcoin holdings and rely on court-ordered sales if borrowers default.
South Korean bank Jeonbuk Bank, a subsidiary of JB Financial Group, has launched Bitcoin-backed loans for corporate clients, according to EDaily. The bank is the country's first commercial institution to accept Bitcoin (BTC) as collateral for won-denominated lending. The service is reportedly limited to businesses seeking operational capital, with a specialized custodian holding the BTC used as collateral.
This move follows amendments to South Korea's Civil Enforcement Rules, which took effect on October 1st. These rules establish procedures for seizing and liquidating claims to virtual assets, allowing the bank to recover funds through court-ordered sales in case of default. Jeonbuk Bank has adopted a system that enables it to recover outstanding loans through cryptocurrency sales without directly possessing the assets.
The specific loan amount, interest rate, and loan-to-value requirements have not been disclosed by the bank. A bank representative confirmed that a loan had already been issued, but declined to identify the borrower.
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- South Korean bank launches Bitcoin-backed business loans: Report cointelegraph.com
