Besides trading and long-term investment, can holding Bitcoin be used to borrow money from a bank? Banks in South Korea have begun to undertake Bitcoin-guaranteed loans, while Taiwan is still in its infancy. This issue will be discussed at the "Virtual Assets as Credit Collateral" session on the institutional day of the "11th Taiwan Blockchain AI Experts Annual Conference" on November 24. It will be opened by Chen Nianping, executive director of PwC. The organizer invites Yushan Bank, PwC and the Financial Research and Training Institute to talk from the perspectives of credit practice, risk management and financial supervision.

The annual conference is hosted by the Taiwan Blockchain Enthusiasts Association (TABEI) and will be held at the National Chengchi University Public Enterprise Center in Taipei from November 23 to 24. Interested readers canRegister online, see the agendaAnnual meeting official website. According to the speaker list on the official website, Tang Zhan, digital director of Yushan Bank, and Chen Tizhen, associate researcher at the Financial Research and Training Institute, are both listed as speakers.

The key to using Bitcoin as collateral: Whoever holds the private key controls the assets

Commonly used collaterals for bank credit are real estate, deposits and securities. Real estate can be mortgaged based on the appraisal report and registration system, with clear rights relationships and relatively slow price changes; there is a centralized custody system for securities, and there are also exchange prices for reference.

Cryptoassets are different. Prices come from multiple trading platforms around the world and change 24 hours a day. The assets are not on bank books, but are controlled by private keys. Whoever controls the private key actually controls the assets. Therefore, "whether the collateral is really under the control of the bank" is the core issue. A common approach is to hand it over to a regulated third-party custodian, or to have the bank build its own custody capabilities, coupled with multiple signatures or decentralized management.

Before banks accept Bitcoin guarantees, they must answer four questions

  • Valuation: Which trading platform prices should be used and how to eliminate abnormal quotations; the guaranteed percentage should also reflect much higher volatility than ordinary stocks.
  • Collection and punishment: The crypto market is open all year round, and prices may drop sharply after banks close. The additional guarantee notification and punishment mechanism must be able to operate around the clock.
  • Custody and control: Keep it on your own or entrust a third party to ensure that the assets are not misappropriated and that the borrower can successfully obtain the right of disposal if it defaults.
  • Legal enforcement: How to set up the security right and whether it can be used against a third party; when the borrower or custodian institution is overseas, which country's law applies.

The supervision aspect is also still being adjusted. The Basel Committee on Banking Supervision will release standards for the prudent handling of bank crypto-asset risk risks at the end of 2022, setting different capital requirements based on asset types; in February this year, the CommitteeStatement after the meetingIt stated that it has accelerated its review of some provisions of this set of standards and will propose updates later this year.

It has been launched in South Korea, and Taiwan will start with the pilot program of financial certification and custody.

According to Korean media reports in October, Jeonbuk Bank became the first bank in South Korea to undertake Bitcoin-guaranteed loans, and only accepted Bitcoins for corporate customers. The guaranteed Bitcoins are handed over to virtual asset operators who have completed the declaration for safekeeping. In the event of default, they will be liquidated through court auctions, and the valuation is based on the weighted average price of multiple global exchanges (Related reports).

The closest thing in Taiwan is currently Bankee’s “Currency Loan”, which includes applicants’ BTC, ETH, and USDT held in MaiCoin and MAX under financial review. However, it is a credit loan, and crypto assets are only used as proof of financial strength, not as a guarantee (Related reports).

Custody is another piece of the puzzle. The Financial Supervisory Commission will open up financial institutions to apply for trial virtual asset custody business in January 2025. By the end of April this year, 5 banks have been approved. In March, the Banking Association was also asked to develop practical guidelines (Related reports). Whether banks can manage crypto assets well on their own is the prerequisite for accepting them as collateral.

Event information

  • Event name: The 11th Taiwan Blockchain Ai Champions Annual Conference
  • Organizer: Taiwan Blockchain Enthusiasts Association (TABEI)
  • Date: November 23 (Monday) to 24 (Tuesday), 2026; the topic of this article will be held at 13:00 on the "Institution Day" on November 24
  • Venue: International Conference Hall, 2F, National Chengchi University Public Enterprise Center (No. 187, Jinhua Street, Daan District, Taipei City)
  • Registration link:accu.ps/vKm9aT
  • Annual meeting official website:chain.tw

this article Can Bitcoin be used as bank collateral? There are already banks in South Korea undertaking this work, but banks in Taiwan need to solve four questions first. first appeared in Chain News ABMedia。