JPMorgan Plans to Accept Bitcoin, Ether as Loan Collateral for Institutional Clients by Year End

JPMorgan Chase & Co. plans to let institutional clients use Bitcoin and Ether holdings as collateral for loans by the end of the year. The initiative will be available globally and will use a third-party custodian to secure the digital assets, Bloomberg reported. The bank has previously accepted crypto-linked ETFs as collateral.

Banks Expand Crypto Services Amid Rising Adoption

The move reflects growing integration of digital assets into mainstream finance. Bitcoin’s price gains and regulatory adjustments under the current U.S. administration have encouraged banks to expand crypto services. JPMorgan’s approach treats crypto like traditional assets such as stocks, bonds, and gold.

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Other firms are also broadening crypto offerings. Morgan Stanley plans to let E*Trade customers access cryptocurrencies next year. State Street, BNY Mellon, and Fidelity provide custody services. Recent rules allow firms like BlackRock to swap client Bitcoin for ETF holdings tracking the token.

Crypto-Backed Lending Returns Amid Client Demand

JPMorgan first explored crypto-backed lending in 2022 but paused the project. Rising client demand and regulatory clarity have prompted its return. Markets have fluctuated, with Bitcoin reaching $126,251 earlier this month.

Banks Integrate Digital Assets into Services

Recent regulatory changes in the United States have encouraged other financial institutions to develop digital asset offerings. Some banks plan to provide cryptocurrency trading, wallet solutions, and investment strategies for clients.

Executives have noted that blockchain-based infrastructure is established and clients should be able to access digital and traditional assets within the same platform.