JPMorgan Eyes Bitcoin and Ethereum for Crypto-Backed Loans

JPMorgan Chase is considering launching crypto-backed loans using Bitcoin (BTC) and Ethereum (ETH) as collateral, according to Financial Times. The Wall Street titan, long known for its cautious stance on digital assets, may begin issuing these loans as early as next year.

This potential shift comes as both institutional demand for crypto-native financial products and regulatory clarity around digital assets grow. Sources close to the matter told the Financial Times that JPMorgan is actively exploring how it could offer loans secured by customers’ cryptocurrency holdings, marking a key moment in the integration of digital assets into the traditional banking system.

JPMorgan Signals a Turn in Crypto Strategy

JPMorgan has not confirmed the plan publicly and declined comment when contacted by multiple outlets. However, insiders indicate that internal discussions are progressing and that the bank could be ready to roll out the offering in 2026.

This development stands in sharp contrast to the views of JPMorgan CEO Jamie Dimon, who once called Bitcoin a “fraud” and said it would “eventually blow up.” Despite his personal criticism, the firm has quietly built up significant infrastructure around blockchain and crypto technology in recent years. This includes launching its Onyx blockchain division and allowing clients limited exposure to digital assets.

In May, Dimon reiterated his skepticism of Bitcoin, noting its use in illegal transactions and the risk of misuse. Still, he admitted that clients want access. "We're going to allow you to buy it, we're not going to custody it," he said at the bank’s annual Investor Day.

Crypto as Collateral: Unlocking Liquidity Without Selling

Crypto-backed loans offer holders a way to generate liquidity without selling their assets. 

For high-net-worth investors, funds, and corporate treasuries that hold substantial crypto reserves, this opens new pathways to capital efficiency. JPMorgan’s entry into this space would validate crypto collateral in the eyes of traditional finance.

The bank will not custody the crypto itself. Due to regulatory restrictions, U.S. banks cannot hold digital assets directly on their balance sheets. Instead, JPMorgan is expected to work with licensed custodians like Coinbase to manage seized collateral in the event of borrower defaults.

This structural workaround ensures compliance while opening a new frontier in crypto-based credit markets, a sector that has previously been dominated by DeFi platforms and crypto-native lenders like Aave, MakerDAO, and Nexo.

Crypto Regulation Gains Clarity in Washington

JPMorgan’s move comes at a time of regulatory momentum in Washington. In recent weeks, the U.S. House of Representatives passed three major bills aimed at defining the legal framework for digital assets.

The Digital Asset Market Structure Clarity Act passed with bipartisan support, that seeks to assign oversight of Bitcoin and similar tokens to the Commodity Futures Trading Commission (CFTC). The Securities and Exchange Commission (SEC), meanwhile, would retain authority over tokenized securities.

In parallel, the GENIUS Act introduced rules for stablecoins, including reserve requirements and mandatory audits. With stablecoins potentially becoming a multi-trillion-dollar market, these regulations are designed to ensure stability and trust.

The Anti-CBDC Surveillance State Act, a third bill, restricts the Federal Reserve from issuing a retail central bank digital currency. Supporters believe this safeguards civil liberties and protects traditional payment rails from government overreach.

Together, these bills aim to create a more predictable environment for institutions considering crypto-related products and services.

Institutional Interest in Digital Assets Is Growing

Other major financial firms, including Bank of America and Citibank, are also deepening their involvement in digital assets. Both banks are reportedly developing stablecoin strategies, possibly in anticipation of client demand and changing regulatory tides.

What makes JPMorgan’s strategy notable is its focus on crypto as productive collateral. While many institutions remain cautious or limit exposure to indirect channels like futures, JPMorgan is assessing real-world use cases for BTC and ETH in the context of secured lending.

The strategy aligns with the trend of turning digital assets from passive holdings into yield-generating instruments. With interest in tokenized assets and blockchain-based capital markets growing, crypto-backed loans offer a tangible bridge between two financial worlds.

What Comes Next for Crypto-Backed Loans?

If JPMorgan moves forward with this strategy, it could trigger a domino effect across Wall Street. Once one major bank offers BTC- and ETH-backed loans, others may follow to stay competitive. This could unlock billions in institutional-grade credit tied to crypto holdings.

The implications are wide-ranging:

• Crypto adoption gains new legitimacy.
• Bitcoin and Ethereum take on roles traditionally reserved for gold or stocks.
• Banks move closer to offering full-stack crypto financial services, even if through third-party partners.

It’s also a win for crypto holders. Rather than liquidating assets, they gain access to cash while retaining upside exposure.