JPMorgan Lets Customers Use Bitcoin and Ether as Collateral for Loans: Report

JPMorgan Chase & Co. is reportedly working to get its institutional clients to take advantage Bitcoin And Ethereum as collateral for loans, marking one of the most direct integrations of crypto assets into Wall Street’s credit systems to date.

The program, expected to launch in late 2025, will rely on a third-party custodian to hold the pledged tokens. Bloomberg hours before the Friday opening bell. JPMorgan shares fell 0.18% to $294.93 in pre-market trading.

Under the reported framework, customers would be able to place cryptocurrencies held by an approved custodian against lines of credit or structured loans, allowing banks to manage their exposure without directly taking custody of the digital assets.

It builds on JPMorgan’s previous decision in June to accept crypto exchange-traded funds (ETFs) as collateral, expanding that policy from derivatives and fund shares to the underlying assets themselves.

Declutter has reached out to JPMorgan to ask if the program is live or still in development, and how the bank plans to manage the custody, valuation and risk for cryptocurrencies used as collateral for loans, and will update this article if the bank responds.

According to the rules

Once live, the program could position Bitcoin and Ethereum within the same collateral ecosystem as traditional investment vehicles such as government bonds, gold or equities, albeit with higher volatility and risk.

But JPMorgan’s move could be “more about inevitability” as crypto wasn’t that welcome before, says Samuel Patt, co-founder of Bitcoin metaprotocol OP_NET. Declutter.

Patt noted that there was a “fundamental tension” at work, with Bitcoin, for example, being built “to eliminate counterparty risk, and not be re-mortgaged within the same system it was intended to disrupt.”

“The more financial institutions integrate Bitcoin, the more they will have to learn to play by the rules, not the other way around,” Patt said.

When banks start accepting crypto, they are introducing “24/7 mark-to-market assets into a system that still operates on outdated settlement rails,” he said. “This poses a challenge for managing credit exposure; you cannot treat BTC in the same way as government bonds or corporate bonds.”

“The risk desk must now model intraday volatility, exchange liquidity, and custody solvency in real time. Credit committees will need new frameworks for crypto collateral: dynamic margins, off-chain oracle feeds, and custody risk insurance will become core requirements, not afterthoughts,” Patt explains.

Banks integrating digital assets

JPMorgan’s move appears to follow a broader alignment among U.S. banks as they integrate digital assets into lending and asset management, amid efforts to recalibrate federal guidance on crypto engagement.

Before the GENIUS Act took effect in July, major U.S. banks were already consolidating plans to challenge the law stable currency market.

In July, BNY Mellon partnered with Goldman Sachs to launch a tokenized money market product for institutional clients, expanding digital asset custody and settlement capabilities that had existed since 2021.

Last month, Morgan Stanley pledged to allow retail clients to trade on its ETrade platform Bitcoin, EthereumAnd Solana by the second quarter of next year. Earlier this month, the bank confirmed it is easing restrictions on crypto investments, expanding access to crypto funds across all customer segments and account types, including retirement accounts.