JPMORGAN Chase & Co plans to allow institutional clients to use their holdings of Bitcoin and Ether as collateral for loans by the end of the year, in a significant deepening of Wall Street’s crypto integration.
The programme, offered globally, will rely on a third-party custodian to safeguard the pledged tokens, according to people familiar with the matter. It builds on JPMorgan’s earlier move to accept crypto-linked exchange-traded funds (ETFs) as collateral.
A JPMorgan spokesperson declined to comment.
The expansion underscores how quickly crypto is being pulled into the financial system’s core plumbing. With Bitcoin rallying this year and the Trump administration rolling back regulatory hurdles, major banks are starting to bring digital assets deeper into the lending system.
For JPMorgan, it’s both a symbolic shift and a functional one: the bank whose chief executive, Jamie Dimon, earlier dismissed Bitcoin as a “hyped-up fraud” or a “pet rock”, is no longer treating crypto as a fringe bet. Instead, it will be pledged as security for a loan, the same way stocks, bonds, gold and other familiar assets are.
Lately, Dimon has moderated his stance somewhat, while remaining sceptical. “I don’t think we should smoke, but I defend your right to smoke,” Dimon said at JPMorgan’s investor conference in May. “I defend your right to buy Bitcoin, go at it.”
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JPMorgan is far from the only established Wall Street firm to dive deeper into digital assets lately, as the Trump administration’s pro-crypto stance and subsequent regulatory easing has helped them get more comfortable with the risk.
For instance, Morgan Stanley plans to allow customers on its E*Trade retail platform to access to popular cryptocurrencies beginning in the first half of next year. Other firms to get in on the action include State Street, Bank of New York Mellon and Fidelity, offering services like crypto custody.
A recent regulatory change also allowed firms like BlackRock to accept investors’ Bitcoin and swap them for ETF holdings tracking the token.
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JPMorgan first began exploring lending against Bitcoin in 2022 but the project was later shelved, said the people, who asked not to be named because the bank’s plan is not yet public. Since then, client demand for cryptocurrency support across Wall Street has spiked as the market has grown and regulations have eased.
Rules governing the space are already live in regions like the European Union, Singapore and the United Arab Emirates, while legislation to regulate crypto market structure is going through the US Congress. And although the market recently experienced a deep sell-off, Bitcoin reached an all-time high of US$126,251 earlier this month.
