JPMorgan Breaks New Ground: Bitcoin and Ethereum Now Accepted as Loan Collateral
Wall Street's crypto cold war thaws—again. JPMorgan just blinked, and the market noticed.
The big pivot
After years of Jamie Dimon's 'Bitcoin is worthless' rhetoric, the banking giant quietly greenlights crypto-backed loans. No fanfare, no press release—just a leaked internal memo confirming clients can now pledge BTC and ETH as collateral. Guess even dinosaurs learn new tricks when profits are at stake.
Why this matters
This isn't some DeFi startup playing fast and loose—it's America's largest bank putting institutional weight behind crypto asset valuation. The move effectively bridges TradFi liquidity with blockchain-native wealth. Though we'd bet good money their risk department is sweating over volatility clauses.
The fine print
Expect brutal LTV ratios and triple-layer KYC. This is JPMorgan, not your friendly neighborhood crypto lender. But for HODLers needing fiat without selling? A game-changer—and another nail in the 'crypto has no utility' coffin.
The kicker
Funny how banks hate crypto... until they realize they can charge 8% APR on it. Welcome to the future of finance—same as the old finance, just with blockchain buzzwords.
JPMorgan plans crypto-backed lending initiative
JPMorgan Chase is reportedly planning to launch a lending service backed by clients' cryptocurrency holdings, including Bitcoin and Ethereum, according to a report from the Financial Times on Tuesday, citing sources familiar with the matter.
The report mentioned that JPMorgan could roll out the new initiative next year — although it is still subject to change. JPMorgan was previously reported to be exploring plans to offer loans secured by crypto exchange-traded funds (ETF), starting with BlackRock's iShares bitcoin Trust. The report noted that lending against the actual assets would be a further step.
The move WOULD represent a U-turn for JPMorgan's CEO, Jamie Dimon, who has long been a skeptic of Bitcoin. Dimon had previously announced that the bank would allow clients to purchase Bitcoin, although he remains critical of the digital asset.
Dimon also announced last week that the bank plans to enter the stablecoin market with a "limited-use" stablecoin primarily for institutional clients. He stated that he still didn't see how they are a better solution to fiat payments, reinforcing his skepticism about crypto.
The report further noted that for JPMorgan to offer loans backed directly by cryptocurrencies, "it would need to resolve the technical issue of how to handle crypto seized from customers who failed to repay their loans."
Since JPMorgan, like most US banks, does not hold digital assets on its balance sheet, it would likely engage a third-party custodian, such as Coinbase, to manage the collateral securely.
JPMorgan's shift toward crypto comes as more banks engage with digital assets, including Morgan Stanley, which is reportedly planning to launch crypto trading through its E*Trade platform.
The shift also aligns with progress in crypto regulation in the US. President Donald TRUMP signed the GENIUS Act on Friday, which introduces a federal framework requiring stablecoin issuers to hold equivalent US Dollar-backed reserves, undergo annual audits, and comply with rules applicable to foreign entities.
This comes after the House of Representatives passed the crypto market Structure CLARITY bill last week, which now heads over to the Senate for final deliberation.
