- The pledged digital tokens will reportedly be safeguarded by a third-party custodian.
- Regulatory easing in the U.S. has encouraged banks to explore crypto lending and investment products more confidently.
JPMorgan Chase is set to allow institutional clients to use Bitcoin and Ether as collateral for loans, marking a notable expansion of crypto into mainstream finance.
By the end of the year, the bank plans to back loans with digital tokens, safeguarded by a third-party custodian, echoing its earlier acceptance of crypto-linked ETFs for collateral, Bloomberg reported.
This move signals a rapid integration of digital assets into traditional banking. For JPMorgan, once critical of cryptocurrencies, the step represents both a symbolic and functional change.
Jamie Dimon, the bank’s CEO, previously dismissed Bitcoin as a “hyped-up fraud” and a “pet rock,” but now supports clients’ right to engage with crypto, highlighting the bank’s evolving stance.
JPMorgan is joining other major financial players in extending crypto services. Morgan Stanley plans to provide E*Trade users access to popular cryptocurrencies next year, while State Street Corp., Bank of New York Mellon, and Fidelity offer crypto custody and related services.
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A Shift In Wall Street’s Approach
Regulatory easing under the Trump administration has encouraged these firms to explore crypto lending and investment products more confidently. The idea of lending against Bitcoin first surfaced at JPMorgan in 2022 but was temporarily shelved. According to insiders, rising client demand and regulatory clarity have revived the initiative.
Firms are increasingly treating digital assets like traditional securities, allowing Bitcoin and Ether to serve as collateral alongside stocks, bonds, and gold. Regions including the European Union, Singapore, and the UAE already have rules for crypto-backed lending, while the U.S. is still shaping legislation.
Despite a recent market selloff, Bitcoin reached a record high of $126,251 earlier this month, reflecting the growing scale and potential of crypto in financial markets.
