TradFi giant JPMorgan is reportedly planning to allow its institutional clients to use Bitcoin and Ethereum as loan collateral some time within this year.
Summary
- JPMorgan is set to allow institutional clients to use Bitcoin and Ethereum as collateral for loans, marking a major step toward integrating digital assets into traditional finance.
- The move reflects rising institutional demand for crypto exposure and follows similar initiatives by Swiss banks, signaling a growing global trend of mainstream banks embracing crypto-based lending.
According to a report by Bloomberg, JPMorgan will start allowing their institutional clients to use Bitcoin and Ether holdings as collateral for loans be the end of this year, in a landmark step that further integrates crypto assets into the traditional finance sector.
The program will build upon the bank’s earlier move to start accepting crypto-linked ETFs as collateral for loans. Inside sources have told Bloomberg that the program will be offered on a global scale and will rely on third-parties to provide custody for the pledged tokens.
Sources cite the rising demand for cryptocurrency support from institutional clients as the reason behind the company’s shift towards digital assets. People familiar with the matter claimed that the firm first began exploring the possibility of lending with Bitcoin back in 2022. However, the plan was ultimately shelved as there was not much support for the industry yet.
When asked about the firm’s plan to start accepting Bitcoin (BTC) and Ethereum (ETH) as collateral, a spokesperson from JPMorgan declined to comment on the matter. The move would put BTC and ETH on the same level as more conventional assets like stocks, bonds and gold as clients are able to pledge tokens for a loan.
The decision to start accepting Bitcoin and Ethereum as collateral could serve to unlock deeper liquidity into the crypto market for holders who prefer
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Author: Trisha Husada
