JPMorgan Chase prepares to issue loans directly secured by cryptocurrencies like Bitcoin and Ethereum for the first time.
According to people familiar with the plans, the first such lending could start as early as next year. JPMorgan itself declined to comment. The bank recently took initial steps toward crypto and plans to secure loan transactions against shares in crypto ETFs. The direct pledging of crypto assets would be another significant step. Competitors like Goldman Sachs have so far not accepted crypto assets as collateral.
Dimon has recently noticeably softened his negative stance. "I don't think you should smoke, but I defend your right to do so. The same goes for Bitcoin," he said in May. His early statements about Bitcoin might have deterred potential customers, according to banking circles. Especially those who have built their wealth with cryptocurrencies or have long believed in their future.
JPMorgan is currently also reviewing the technical implementation, particularly how to handle seized crypto assets if borrowers fail to meet their obligations. The bank does not hold cryptocurrencies on its balance sheet and would likely collaborate with third parties like Coinbase for custodial storage.
The loosening of regulation under the Trump administration has changed the climate in Washington in favor of crypto businesses. Morgan Stanley, for example, is considering offering crypto trading via its ETrade platform. The passage of a stablecoin regulation bill in the House of Representatives was welcomed by major banks. They see it as a legal basis to more easily work with digital assets in the future.
Stablecoins, which, unlike Bitcoin or Ethereum, are tied to assets like the US dollar, are considered less volatile and easier to integrate into existing financial structures. However, banks remain cautious: the connection of digital assets to money laundering and compliance risks remains a central issue.
Nevertheless, JPMorgan has gained early experience with digital assets. Already in 2019, the institution developed JPM Coin, its own bank-based digital currency for institutional customer payments.
