JPMorgan to Accept Bitcoin and Ether as Loan Collateral
- JPMorgan to let institutional clients use BTC and ETH as loan collateral by 2025.
- The move extends its ETF collateral program to direct cryptocurrency pledging globally.
- Regulatory clarity and rising demand drive JPMorgan’s deeper crypto market adoption.
JPMorgan plans to allow institutional clients to use Bitcoin and Ethereum as collateral for loans by the end of 2025. The initiative, set to roll out globally, is one of the deepest integrations of digital assets into Wall Street’s traditional credit systems. The program will rely on a third-party custodian to safeguard pledged crypto assets, ensuring compliance and minimizing counterparty risk.
From ETF Collateral to Direct Crypto Pledging
JPMorgan is expanding its loan system to let big clients use actual crypto, like Bitcoin and Ethereum, as collateral. This move builds on its earlier policy that only allowed crypto-related ETFs for loans. Now, institutions can pledge their crypto directly instead of selling it, giving them more flexibility and cash flow.
The update highlights how major investors are becoming more comfortable using digital assets in traditional banking. Approved clients will soon be able to use their crypto stored with licensed custodians to back loans or credit deals.
This means the bank will manage exposure without directly taking custody of digital tokens. Such arrangements aim to balance regulatory compliance with growing demand from clients seeking credit against crypto holdings.
Notably, JPMorgan first explored crypto-backed lending in 2022 but paused the effort amid market uncertainty. Renewed momentum this year comes from clearer regulations and increased institutional demand.
With digital asset frameworks now active in the European Union, Singapore, and the United Arab Emirates and pending legislation in the U.S. Congress, banks have found more regulatory support for crypto-related operations.
JPMorgan CEO Shift and Institutional Adoption
The move is a change in tone for JPMorgan CEO Jamie Dimon, who once described Bitcoin as a “hyped-up fraud” and compared it to “pet rocks.” At the bank’s investor conference in May, Dimon said, “I don’t think we should smoke, but I defend your right to smoke.”
“I defend your right to buy Bitcoin, go at it,” while still cautious, Dimon’s comments show the bank’s changing approach to meet client interest in digital assets. Across Wall Street, more financial institutions are following similar paths.
Morgan Stanley plans to open crypto trading on its E*Trade retail platform by mid-2026. State Street, Bank of New York Mellon, and Fidelity have all widened their services to include holding and settling digital assets.
These steps show that major banks are moving in line with the friendlier crypto rules under the current U.S. administration. BlackRock has also joined the shift through its spot Bitcoin ETF, letting investors swap Bitcoin directly within the fund.
Together, these changes show how traditional finance is slowly weaving digital assets into its day-to-day systems. JPMorgan’s decision adds to that move, introducing digital collateral into conventional lending structures.
Related: BNY Explores Tokenized Deposits as Blockchain Grows
Risk Controls and Market Integration
Experts note that incorporating crypto assets into lending brings new risk management challenges. Samuel Patt, co-founder of Bitcoin metaprotocol OP_NET, said the move introduces “24/7, mark-to-market assets into a system that still operates on legacy settlement rails.” He added that risk teams must now model intraday volatility, exchange liquidity, and custodial solvency in real time.
For JPMorgan, this means developing updated frameworks for crypto collateral. These include dynamic margin requirements, real-time pricing, and custodial insurance coverage to offset operational and market risks. While such risk controls are standard for traditional assets, digital assets’ volatility demands more frequent valuation and stricter haircuts.
The program’s global scope shows the bank’s intention to accommodate institutional clients in multiple jurisdictions. However, operational details, such as margin levels, approved custodians, and valuation procedures, are still being finalized. Once implemented, the system could allow clients to unlock liquidity without selling their crypto positions, maintaining portfolio exposure while meeting short-term financing needs.
JPMorgan’s initiative also comes as other major U.S. banks adjust their digital strategies. In July, BNY Mellon and Goldman Sachs launched a tokenized money market product for institutional investors, while Morgan Stanley confirmed plans to broaden access to crypto funds across all account types. These actions collectively show the growing alignment between traditional finance and the digital asset ecosystem.
Meanwhile, JPMorgan’s plan to accept Bitcoin and Ether as collateral shows how digital assets are entering the core of institutional finance. The change from ETF collateral to direct token pledging shows a maturing market structure where crypto functions alongside traditional securities. With major banks now accepting digital asset integration, the gap between conventional and crypto finance continues to narrow.
