JPMorgan Chase has begun exploring the possibility of offering loans backed directly by clients’ cryptocurrency holdings, marking a potential turning point in the bank’s approach to digital assets.
The move reflects the broader institutional shift that has seen traditional financial players take a more active role in the evolving crypto ecosystem.
The proposed policy, which could take effect as early as next year, would allow clients to use major cryptocurrencies, such as Bitcoin and Ethereum, as collateral for loans. While the bank has already taken steps in this direction by exploring lending against crypto-related exchange-traded funds (ETFs), using the digital tokens themselves would mark a deeper level of involvement. The plans remain under consideration and are not yet final.
This development would represent a significant change in tone for JPMorgan, whose CEO, Jamie Dimon, was once one of the most vocal critics of Bitcoin, calling it a fraud in 2017. Although the bank has maintained a cautious stance, it has gradually shifted toward greater engagement with the digital asset ecosystem, aligning with a broader trend among US financial institutions.
Shifting regulatory and competitive landscape
The reconsideration comes at a time when regulatory momentum in the US is tilting toward formalising rules around digital assets. Recently, the US House of Representatives approved a bill to regulate stablecoins, the first major piece of crypto legislation to pass Congress. This move was widely welcomed by traditional banks, which see clearer regulation as a gateway to safer and more scalable crypto-related services. Unlike cryptocurrencies such as Bitcoin, stablecoins are pegged to assets like the USD and are perceived as more suitable for integration into banking infrastructure.
The second Trump administration’s preference for lighter-touch regulation has also encouraged some institutions to re-evaluate their crypto strategies. While JPMorgan is considering crypto-backed lending, Morgan Stanley is reportedly exploring cryptocurrency trading via its ETrade platform. Meanwhile, Goldman Sachs remains reluctant, declining to accept crypto assets as collateral.
Despite these advances, US banks remain constrained by operational and compliance challenges when engaging with digital assets. For JPMorgan to proceed with crypto-backed lending, it would need to resolve key issues such as how to manage seized collateral from defaulting borrowers and how to maintain secure custody of crypto assets without holding them directly on the bank’s balance sheet. It is expected that any such arrangement would involve third-party custody providers like Coinbase.
JPMorgan’s growing interest in crypto aligns with its broader investments in blockchain and digital finance. In 2019, the bank developed JPM Coin, one of the first blockchain-based digital coins backed by a major financial institution. The latest considerations suggest that digital assets are increasingly being treated not as speculative outliers but as mainstream financial instruments.
