JPMorgan Embraces Crypto as Collateral for Client Loans

JPMorgan Chase is reportedly exploring a new lending product that would allow clients to borrow against their crypto holdings. According to sources cited by the Financial Times, the U.S. banking giant is in internal discussions to launch crypto-collateralized loans, potentially as early as next year. The plan would let clients use cryptocurrencies such as Bitcoin, Ethereum, or even crypto-focused ETFs as collateral in exchange for cash or credit. While still in its exploratory phase, the product would be JPMorgan’s clearest signal yet that it is taking crypto seriously.

Institutions lean into digital assets

The news is especially interesting given CEO Jamie Dimon’s long-standing skepticism toward Bitcoin, which he once called a “fraud.” Despite Dimon’s vocal criticisms, JPMorgan has quietly expanded its crypto exposure over the past several years. The bank has built blockchain-based settlement systems like JPM Coin, invested in crypto infrastructure firms, and offered access to crypto investment products for its wealthy clients.

But lending directly against crypto marks an entirely new stage, and that’s what’s happening, according to Financial Times. JPMorgan is not alone. BlackRock, Fidelity, and Goldman Sachs have all expanded their crypto capabilities. By allowing clients to borrow against crypto holdings, JPMorgan could help high-net-worth individuals and funds unlock liquidity without selling long-term assets. 

Risks and challenges ahead

Of course, this shift is not without risk. Lending against crypto presents unique challenges, especially when it comes to price volatility, liquidation rules, and custody infrastructure. Traditional banks are not yet fully equipped to handle these technical nuances, and JPMorgan will need to establish robust risk management protocols to avoid forced liquidations during sharp drawdowns.

There’s also the issue of rehypothecation and regulatory scrutiny. If crypto assets used as collateral are locked or staked, questions arise around what banks can do with them, and who ultimately controls them in the event of a default.

Still, the move is a sign of the times. With the GENIUS Act and other legislative developments laying the groundwork for clearer rules on stablecoins and digital assets, Wall Street firms are beginning to align their business models with the next generation of financial products.

If JPMorgan pushes forward, it could create a new wave of crypto adoption, from the heart of the traditional banking system.