Wall Street giant JPMorgan Chase is exploring the possibility of offering loans backed by clients’ crypto holdings, signaling a new era of mainstream banking acceptance of digital assets.
In a strategic pivot, the bank is considering plans to extend credit backed by crypto assets such as Bitcoin and Ethereum, according to a Financial Times report. The initiative, which could launch as early as 2026, underscores how traditional lenders are increasingly integrating crypto into their core services.
If finalized, the policy would mark a sharp departure from CEO Jamie Dimon’s previously hostile stance on crypto. In 2017, Dimon famously dismissed Bitcoin as a “fraud” and warned it was only useful for criminals. He even said he would fire any trader caught buying it.
However, Dimon’s tone has softened in recent years. Speaking in May, he likened the right to own crypto to the right to smoke, even though he does not engage in such acts himself.
Big Banks Begin Embracing Crypto
JPMorgan has cautiously entered the crypto space by planning to lend against crypto exchange-traded funds (ETFs). Accepting direct crypto collateral, actual coins held by clients, would take the bank deeper into a space long seen as too volatile or opaque for traditional finance.
Other top banks, including Goldman Sachs, still avoid crypto as collateral. However, with a more favorable regulatory climate emerging, especially under the Trump administration, the tide is shifting. Morgan Stanley, for instance, is reportedly exploring crypto trading via its ETrade platform.
Adding momentum to the shift, last week the U.S. House of Representatives passed landmark legislation to regulate stablecoins. Big banks have welcomed the bill as it offers long-awaited regulatory clarity and could unlock broader adoption.
Challenges Ahead for Crypto Lending
Despite growing interest, crypto-backed lending faces major hurdles. Regulators have warned that digital assets are prone to misuse for illicit transactions, heightening scrutiny around anti-money laundering (AML) compliance. JPMorgan would also need to develop mechanisms to seize or manage crypto in the event of borrower default.
The bank doesn’t currently hold cryptocurrencies on its balance sheet, meaning it would likely partner with a third-party custodian to hold the crypto collateral. Exchanges like Coinbase already offer such custodial services.
Though historically cautious about mainstream cryptocurrencies, JPMorgan has been proactive in blockchain innovation. In 2019, the bank launched one of the first digital coins developed by a major U.S. financial institution.
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