According to the Financial Times, Wall Street giant JPMorgan Chase plans to launch digital asset collateral loans, a major change in how traditional banks view Bitcoin.
JPMorgan allows clients to borrow money as collateral using digital asset holdings, namely Bitcoin (BTC) and Ethereum (ETH). If approved, the bank will roll out this next year.
Other large US banks, Bank of America and Citibank are also exploring digital asset products. The wave of interest from Wall Street is driven by a more digital asset-friendly regulatory environment under the Trump administration.
This is particularly noteworthy given the long history of JPMorgan CEO Jamie Dimon’s skepticism about Bitcoin. In 2017, he even threatened to call Bitcoin a “scam” and fire the employee who traded it. He doubled his criticism over the years, and at one point called it the “Ponzi Plan.”
However, Dimon’s tone has been softer recently. In May, he said: “I don’t think you should smoke, but I defend your right to smoke. I defend your right to buy Bitcoin.” He added: “We allow you to buy it, we’re not going to detain it.”
This “handoff” approach means that JPMorgan will not hold Bitcoin on its balance sheet. Instead, they work with third-party custodians like Coinbase to manage assets that are used as collateral for loans.
JPMorgan can already borrow clients against Bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust (IBIT). However, this new plan goes a step further and allows loans to be made to actual Bitcoin holdings. This is something most large banks avoided due to complexity and risk.
With this new service, new complexity rises. If a client uses Bitcoin or Ethereum as collateral for a loan and is unable to repay it, the bank must seize and sell the digital assets. This creates technical and regulatory challenges, including how to safely and legally manage these assets.
They use custodians who have experience in managing digital assets, but the risks of money laundering and regulation remain pronounced.
JPMorgan has participated in increased regulatory approvals in Washington, particularly in the digital asset action around Stablecoins. This is a digital currency that is fixed in traditional Fiat currencies, such as the US dollar.
US President Donald Trump recently signed the law, the Genius Act (a bill regulating stubcoin). This clarity encourages financial institutions to explore digital asset services that were once too dangerous.
Jamie Dimon is still cautious, but said JPMorgan will be more involved with Stablecoins. He added that he “understands that and wants to be ‘good at it.’
The bank’s size and reputation controls over $4.3 trillion in assets under management, but it gives it legitimacy to Bitcoin-based financial services and attracts more institutional customers who want to borrow against Bitcoin without selling.
The plan is still under discussion and may change, but multiple sources report that JPMorgan can start service as early as 2026 or later, depending on how the regulatory environment evolves.
