Bitcoin As Collateral? JPMorgan Steps Into The Crypto Lending Game

by
Alisa Davidson

Revealed: August 05, 2025 at 11:00 am Up to date: August 04, 2025 at 10:43 am

by Ana

Edited and fact-checked:
August 05, 2025 at 11:00 am

In Transient

JPMorgan is exploring crypto-backed loans and stablecoin choices, signaling a serious shift in conventional banking’s embrace of digital property.

JPMorgan Chase, the largest bank in the United States, is reportedly considering offering loans backed by cryptocurrencies such as Bitcoin and Ether, a move that could mark a significant shift in traditional banking's relationship with digital assets.
According to sources cited by the Financial Times, the bank is evaluating the feasibility of rolling out this service by 2026. If implemented, it would be a milestone moment for the adoption of crypto within the legacy financial system.
This development aligns with JPMorgan's growing interest in stablecoins and the broader crypto ecosystem. While CEO Jamie Dimon has historically voiced skepticism toward Bitcoin, recent comments suggest a more nuanced stance, especially in light of increasing institutional interest and evolving regulatory clarity.
A New Approach to Digital Asset Lending
JPMorgan's potential crypto-backed loan program reflects a broader recalibration of its approach to digital assets. The bank is reportedly exploring how to issue loans using cryptocurrencies as collateral. Unlike previous considerations where crypto was used only for net worth evaluations, JPMorgan is now moving toward direct lending based on the value of crypto holdings.
Although these plans are still in the works and may change, the sources reported that the bank's first round of crypto lending could happen as early as next year. However, one of the potential technical issues will be how the bank may deal with collateral in the event of default. Because JPMorgan does not currently custody crypto assets, it will likely need to work with a third-party custodian.
Dimon Changes Stance on Crypto
CEO Jamie Dimon has made a dramatic pivot from where he's been in the past. In 2017, Dimon famously called Bitcoin a "fraud" and said he'd fire anyone who traded it. In the years since, he continued down that path by calling crypto a "scam" and a "waste of time." He has also acknowledged, however, a few times, that blockchain technology is valuable.
In recent remarks, Dimon struck a different and more balanced tone. Speaking on CNBC, Dimon said while he personally remains unconvinced by Bitcoin, he believes in "stablecoins" and the underlying blockchain-related infrastructure. He said JPMorgan will be involved in the stablecoin space because, "It's what the customer wants... not what we want."
Dimon has also gone on record defending the rights of individuals to buy Bitcoin, likening it to defending the right to smoke even if one personally disapproves. Although JPMorgan won’t custody Bitcoin, it will permit clients to purchase it, a sign of growing institutional flexibility.
The Stablecoin Push
JPMorgan's growing interest in stablecoins comes on the heels of the recently passed GENIUS Act, which provides a regulatory framework for stablecoins in the U.S. Dimon noted that the bank will eventually offer its own stablecoin, adding legitimacy to an industry long in search of validation from Wall Street giants.
Dimon stated that "stablecoins may offer advantages over traditional cash," particularly in areas like near-instant payments. However, despite increasing enthusiasm, JPMorgan strategists led by Teresa Ho cautioned that projections of a $2 trillion stablecoin market by 2028 are "a little bit optimistic."
The team acknowledged that the conditions surrounding stablecoins are still developing, even though adoption continues to grow. Currently, stablecoins account for less than 1% of global money movement; there are still significant regulatory and technical challenges to overcome before they can be more widely used.
Legal Hurdles and Regulatory Shifts
The primary challenge for banks like JPMorgan to facilitate crypto-backed loans, specifically, the secure borrowing and lending of cryptocurrencies, is legal enforceability. Cryptocurrencies are not tangible assets and using crypto as collateral raises the issue of how to secure a valid claim in case of default.
However, legislative changes are smoothing the path. In 2022, amendments were made to the U.S. Uniform Commercial Code (UCC) to allow for legally secure treatment of digital assets as collateral. About 30 states have adopted these changes so far, including New York, where JPMorgan is based.
The state senate approved the updated UCC in June and is still awaiting the Governor's final approval. These regulatory improvements and the GENIUS Act contribute to a more favorable landscape for financial institutions exploring crypto implementation.
Institutional Integration and Market Impact
If JPMorgan goes ahead, and offers crypto lending, it could pave the way for other major institutions to enter the fray. The fallout of this establishment could be profound, paving the way to college campuses that finally promote legitimizing crypto as a collateral system, as well as expanding its overall use as money within traditional finance.
However, challenges remain. Crypto volatility presents inherent risk for any lending, and there is also the compliance component for banks regarding anti-money laundering (AML) and counter-terrorist financing (CTF).
The Coinbase Partnership Making the News
In a move to bridge the gap between traditional finance and digital assets, JPMorgan has partnered with crypto exchange Coinbase. Beginning this fall, Chase credit card holders will be able to purchase crypto directly on Coinbase. By 2026, JPMorgan customers will even be able to redeem their Chase Ultimate Rewards Points for USDC, a stablecoin issued by Circle.
Coinbase called it "the first major rewards program redeemable for crypto" and noted that Chase customers will also have the ability to link their credit card accounts to Coinbase and use their crypto balances. This is a meaningful, new path to make the sale of crypto more mainstream for consumers.
Competing With DeFi
While JPMorgan is planning to venture into crypto lending, it will be in direct competition with decentralized finance (DeFi) platforms, which can easily be considered the best way of crypto lending. As stated by Sergej Kunz, co-founder of 1inch, what's interesting is that DeFi has everything in their favor with lower fees and was able to offer more collateral options.
Kunz pointed out, DeFi protocols we are building today will optimize for efficiency and cost, making the lending protocol more competitive than what traditional banks can currently offer. However, JPMorgan's venture will also help to attract a more conservative customer to crypto that wants to access it in the way that seems safer to them i.e. a regulated financial institution.
Broader Industry Trends
JPMorgan’s exploration of crypto reflects an industry-wide trend. Competitors, like Citigroup and Bank of America, have shown interest in launching their own stablecoins and enhancing the crypto services they offer. These events indicate that Wall Street is leaving its crypto skepticism behind, and taking some steps forward with caution.
The bank's move into crypto-backed loans and issuance of stablecoins demonstrates this move. With the advantage of legislation and increasing consumer interest, financial institutions are now pushing to identify their positions in the digital asset economy.
JPMorgan’s Crypto Journey Continues
JPMorgan's ambitions to offer crypto-backed loans and develop a stablecoin highlight a momentous shift in the bank's attitude towards digital assets. There are still hurdles ahead—from custody logistics to legal and regulatory challenges—but the upside is too big to ignore.
As a financial system continues to change, a shift in the future of finance may just have begun with established financial institutions like JPMorgan adopting crypto. A future where digital assets are not just used alongside the traditional finance industry but where those digital assets are part of the traditional finance industry. Whether out of customer demand, competitive pressure, or regulatory clarity, JPMorgan's entrance into the world of crypto is a symbolic watershed moment for the future of finance.

JPMorgan Chase, the most important financial institution in the USA, is reportedly contemplating providing loans backed by cryptocurrencies reminiscent of Bitcoin and Ether, a transfer that would mark a big shift in conventional banking’s relationship with digital property.

In line with sources cited by the Monetary Instances, the financial institution is evaluating the feasibility of rolling out this service by 2026. If carried out, it might be a milestone second for the adoption of crypto throughout the legacy monetary system.

This improvement aligns with JPMorgan’s rising curiosity in stablecoins and the broader crypto ecosystem. Whereas CEO Jamie Dimon has traditionally voiced skepticism towards Bitcoin, current feedback counsel a extra nuanced stance, particularly in mild of accelerating institutional curiosity and evolving regulatory readability.

A New Strategy to Digital Asset Lending

JPMorgan’s potential crypto-backed mortgage program displays a broader recalibration of its strategy to digital property. The financial institution is reportedly exploring the right way to subject loans utilizing cryptocurrencies as collateral. Not like earlier concerns the place crypto was used just for internet value evaluations, JPMorgan is now transferring towards direct lending based mostly on the worth of crypto holdings.

Though these plans are nonetheless within the works and will change, the sources reported that the financial institution’s first spherical of crypto lending may occur as early as subsequent 12 months. Nevertheless, one of many potential technical points will probably be how the financial institution might cope with collateral within the occasion of default. As a result of JPMorgan doesn’t at the moment custody crypto property, it should possible have to work with a third-party custodian.

Dimon Adjustments Stance on Crypto

CEO Jamie Dimon has made a dramatic pivot from the place he’s been prior to now. In 2017, Dimon famously known as Bitcoin a “fraud” and mentioned he’d hearth anybody who traded it. Within the years since, he continued down that path by calling crypto a “rip-off” and a “waste of time.” He has additionally acknowledged, nonetheless, a couple of instances, that blockchain know-how is effective.

In current remarks, Dimon struck a distinct and extra balanced tone. Talking on CNBC, Dimon mentioned whereas he personally stays unconvinced by Bitcoin, he believes in “stablecoins” and the underlying blockchain-related infrastructure. He mentioned JPMorgan will probably be concerned within the stablecoin area as a result of, “It’s what the shopper needs… not what we would like.”

Dimon has additionally gone on report defending the rights of people to purchase Bitcoin, likening it to defending the appropriate to smoke even when one personally disapproves. Though JPMorgan received’t custody Bitcoin, it should allow purchasers to buy it, an indication of rising institutional flexibility.

The Stablecoin Push

JPMorgan’s rising curiosity in stablecoins comes on the heels of the lately handed GENIUS Act, which supplies a regulatory framework for stablecoins within the U.S. Dimon famous that the financial institution will finally supply its personal stablecoin, including legitimacy to an {industry} lengthy looking for validation from Wall Road giants.

Dimon acknowledged that “stablecoins might supply benefits over conventional money,” significantly in areas like near-instant funds. Nevertheless, regardless of growing enthusiasm, JPMorgan strategists led by Teresa Ho cautioned that projections of a $2 trillion stablecoin market by 2028 are “a little bit bit optimistic.”

The staff acknowledged that the situations surrounding stablecoins are nonetheless growing, regardless that adoption continues to develop. At the moment, stablecoins account for lower than 1% of worldwide cash motion; there are nonetheless important regulatory and technical challenges to beat earlier than they are often extra broadly used.

Authorized Hurdles and Regulatory Shifts

The first problem for banks like JPMorgan to facilitate crypto-backed loans, particularly, the safe borrowing and lending of cryptocurrencies, is authorized enforceability. Cryptocurrencies will not be tangible property and utilizing crypto as collateral raises the problem of the right way to safe a legitimate declare in case of default.

Nevertheless, legislative adjustments are smoothing the trail. In 2022, amendments had been made to the U.S. Uniform Business Code (UCC) to permit for legally safe therapy of digital property as collateral. About 30 states have adopted these adjustments to this point, together with New York, the place JPMorgan relies.

The state senate accredited the up to date UCC in June and remains to be awaiting the Governor’s last approval. These regulatory enhancements and the GENIUS Act contribute to a extra favorable panorama for monetary establishments exploring crypto implementation.

Institutional Integration and Market Influence

If JPMorgan goes forward, and presents crypto lending, it may pave the best way for different main establishments to enter the fray. The fallout of this institution might be profound, paving the best way to school campuses that lastly promote legitimizing crypto as a collateral system, in addition to increasing its general use as cash inside conventional finance.

Nevertheless, challenges stay. Crypto volatility presents inherent threat for any lending, and there may be additionally the compliance part for banks relating to anti-money laundering (AML) and counter-terrorist financing (CTF).

The Coinbase Partnership Making the Information

In a transfer to bridge the hole between conventional finance and digital property, JPMorgan has partnered with crypto change Coinbase. Starting this fall, Chase bank card holders will have the ability to buy crypto immediately on Coinbase. By 2026, JPMorgan clients will even have the ability to redeem their Chase Final Rewards Factors for USDC, a stablecoin issued by Circle.

Coinbase known as it “the primary main rewards program redeemable for crypto” and famous that Chase clients can even have the flexibility to hyperlink their bank card accounts to Coinbase and use their crypto balances. It is a significant, new path to make the sale of crypto extra mainstream for shoppers.

Competing With DeFi

Whereas JPMorgan is planning to enterprise into crypto lending, it is going to be in direct competitors with decentralized finance (DeFi) platforms, which might simply be thought-about one of the simplest ways of crypto lending. As acknowledged by Sergej Kunz, co-founder of 1inch, what’s fascinating is that DeFi has all the things of their favor with decrease charges and was in a position to supply extra collateral choices.

Kunz identified, DeFi protocols we’re constructing right this moment will optimize for effectivity and value, making the lending protocol extra aggressive than what conventional banks can at the moment supply. Nevertheless, JPMorgan’s enterprise can even assist to draw a extra conservative buyer to crypto that wishes to entry it in the best way that appears safer to them i.e. a regulated monetary establishment.

Broader Trade Developments

JPMorgan’s exploration of crypto displays an industry-wide pattern. Opponents, like Citigroup and Financial institution of America, have proven curiosity in launching their very own stablecoins and enhancing the crypto providers they provide. These occasions point out that Wall Road is leaving its crypto skepticism behind, and taking some steps ahead with warning.

The financial institution’s transfer into crypto-backed loans and issuance of stablecoins demonstrates this transfer. With the benefit of laws and growing shopper curiosity, monetary establishments at the moment are pushing to establish their positions within the digital asset financial system.

JPMorgan’s Crypto Journey Continues

JPMorgan’s ambitions to supply crypto-backed loans and develop a stablecoin spotlight a momentous shift within the financial institution’s angle in direction of digital property. There are nonetheless hurdles forward—from custody logistics to authorized and regulatory challenges—however the upside is simply too huge to disregard.

As a monetary system continues to vary, a shift in the way forward for finance may have begun with established monetary establishments like JPMorgan adopting crypto. A future the place digital property will not be simply used alongside the normal finance {industry} however the place these digital property are a part of the normal finance {industry}. Whether or not out of buyer demand, aggressive stress, or regulatory readability, JPMorgan’s entrance into the world of crypto is a symbolic watershed second for the way forward for finance.

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About The Writer

Alisa, a devoted journalist on the MPost, makes a speciality of cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a eager eye for rising tendencies and applied sciences, she delivers complete protection to tell and interact readers within the ever-evolving panorama of digital finance.

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