JPMorgan to Accept Bitcoin and Ether as Loan Collateral
JPMorgan Chase & Co. will let institutional clients use Bitcoin and Ether as collateral for loans by the end of the year. Investors can borrow funds by pledging their crypto assets, similar to using stocks, bonds, or gold as collateral.
The service will be available globally. A trusted third party will hold and secure the digital tokens, according to Bloomberg. This follows JPMorgan’s earlier move to accept crypto-linked exchange-traded funds (ETFs) as loan collateral, including BlackRock’s iShares Bitcoin Trust.
Jamie Dimon’s Shift on Bitcoin
JPMorgan’s CEO, Jamie Dimon, was once skeptical about Bitcoin. He called the cryptocurrency a “fraud” and compared it to a “pet rock.”
His stance has softened recently. At a conference in May, he said, “I don’t think we should smoke, but I defend your right to smoke.” He added, “I defend your right to buy Bitcoin, go at it.”
The bank’s new program shows how client demand and market growth are influencing its approach to crypto.
Wall Street’s Growing Interest in Crypto Services
Other major firms are expanding into crypto. Morgan Stanley plans to enable cryptocurrency trading on its E*Trade platform next year. Fidelity, State Street, and Bank of New York Mellon are also increasing crypto service offerings, mainly secure digital asset storage.
JPMorgan first explored lending against Bitcoin in 2022 but paused due to unclear regulations. With clearer rules in the European Union, Singapore, and the United Arab Emirates, the bank is now moving forward.
