First Bank, Worst Collateral: Jeonbuk Says Yes to BTC-Backed Loans 💼

South Korea's Jeonbuk Bank, a subsidiary of JB Financial Group, has begun issuing Bitcoin-backed loans to its corporate customers, becoming the country's first commercial bank to accept $BTC as collateral for won-denominated lending, according to local outlet EDaily. The bank is 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. Jeonbuk Bank has adopted a system that allows it to recover outstanding loans through the proceeds of cryptocurrency sales without directly taking possession of the assets, according to EDaily.

The bank has not publicly disclosed the loan amount, interest rate, or loan-to-value requirements. A bank representative told local outlet Chosun that it had already issued a loan but declined to identify the borrower. Cointelegraph reached out to JB Financial Group for confirmation but did not receive an immediate response. Jeonbuk Bank has indicated it plans to expand the service depending on demand and regulatory developments.

Separately, $BTC was trading at $83,500 after rebounding from the $80,300–$80,400 area, a recovery that has steadied the tape but left the asset down roughly 3% on the week. The immediate support band sits at $79,600–$80,400. South Korean crypto exchange profits fell 78% in the first half amid a broader trading slump, according to separate reporting.