JPMorgan Chase & Co. plans to allow its institutional clients to use Bitcoin (BTC) and Ether (ETH) holdings as collateral for loans by the end of this year, according to a Bloomberg report citing people familiar with the matter.
The move marks a landmark step in integrating digital assets into traditional finance and reflects rising institutional demand for crypto-backed financial services.
The program will build upon JPMorgan’s earlier decision to accept crypto-linked exchange-traded funds (ETFs) as collateral for financing, starting with BlackRock’s iShares Bitcoin Trust (IBIT).
Sources told Bloomberg the expanded initiative will be offered globally and rely on third-party custodians to hold pledged tokens, ensuring the bank itself does not directly take custody of the crypto assets.
According to insiders, JPMorgan first explored the possibility of crypto-collateralized lending in 2022, but shelved the idea amid limited institutional support and regulatory uncertainty. Renewed interest from clients seeking flexible liquidity solutions has since revived the project, signaling growing confidence in the digital asset market’s maturity.
By accepting Bitcoin and Ethereum as collateral, JPMorgan could help unlock deeper liquidity for long-term holders who prefer not to sell their crypto positions.
The new structure would allow investors to borrow against their digital assets while retaining exposure to potential price appreciation, offering a tax-efficient alternative to liquidation.
The move also underscores the bank’s gradual embrace of digital assets despite CEO Jamie Dimon’s continued skepticism of cryptocurrencies. JPMorgan, the largest U.S. bank by assets, has progressively expanded its crypto initiatives, from launching the JPM Coin stablecoin in 2020 to holding shares of several spot Bitcoin ETFs in 2024.
If successfully implemented, the new program would make JPMorgan one of the first major global banks to extend direct crypto-backed lending to institutional clients, setting a precedent for broader digital asset integration in mainstream finance.