JPMorgan Chase is reportedly planning to unveil a new offering that will allow its wealth-management clients to use crypto ETFs as loan collateral.
Bloomberg recently reported the development, citing people with direct knowledge of the matter. According to the report, JPMorgan, the largest U.S. bank by assets, would allow its trading and wealth-management clients to use certain crypto assets, specifically crypto ETFs, to secure loans.
Starting with BlackRock’s iShares Bitcoin Trust (IBIT), JPMorgan would allow users to pledge the shares of this Bitcoin ETF as collateral to borrow money.
It is worth noting that IBIT is the world’s largest Bitcoin ETF. As of June 4, IBIT had approximately $70 billion in net assets, 236% more than Fidelity’s FBTC, the second-largest ETF.
Although the offering would initially begin with the IBIT ETF, JPMorgan plans to expand the supported assets to other Bitcoin ETFs. Notably, Bloomberg’s sources claimed that the new service will officially commence in the coming weeks.
According to one source, JPMorgan previously allowed clients to pledge their crypto ETFs as collateral only on a case-by-case basis. Now, the bank intends to extend this capability to its wealth-management customers.
JPMorgan to Consider Clients’ Crypto Holdings in Assessing Net Worth
Furthermore, the leading U.S. bank will include customers’ crypto holdings in their net worth assessments. This would enable the bank to determine the maximum loan amount that eligible clients can obtain.
Based on this condition, clients with significant cryptocurrency holdings can unlock larger credit lines compared to those with smaller cryptocurrency portfolios. In the meantime, JPMorgan has not released an official statement confirming the initiative.
JPMorgan’s Crypto Support
Although JPMorgan’s CEO, Jamie Dimon, has been a major critic of crypto, the bank has unveiled several crypto-related initiatives. According to Dimon, while he does not think people should invest in Bitcoin, he still defends their right to do so.
So far, it has leveraged blockchain for payments and also serves multiple crypto businesses, including Coinbase.
Following Donald Trump’s inauguration, which paved the way for a favorable regulatory environment in the U.S., major banks have introduced several crypto initiatives. For instance, JPMorgan’s major rival, Morgan Stanley, announced plans to launch spot crypto trading for retail clients.
The Crypto Basic reported that Morgan Stanley retail customers would be allowed to trade selected cryptos like Bitcoin via the bank’s E*Trade platform using their existing brokerage accounts.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
