Wall Street Giant JPMorgan to Let Institutions Borrow Against Bitcoin and Ethereum Holdings

Wall Street giant JPMorgan Chase & Co. plans to allow institutional clients to borrow against their Bitcoin and Ethereum holdings, according to Bloomberg reports.

The $4 trillion institutional asset manager announced that it will allow clients to use BTC and ETH directly as collateral for loans by the end of 2025.

The program, available globally, will use a third-party custodian to secure the pledged tokens, according to sources familiar with the matter.

This move builds on a June announcement, in which Cryptonews reported that JPMorgan would test crypto collateral loans with BlackRock’s iShares Bitcoin Trust (IBIT), with plans to expand access to other funds after launch.

JPMorgan has already begun integrating crypto into its core lending operations.

In September, Cryptonews reported that Trimont LLC, a commercial real estate loan servicer managing roughly $730 billion in assets, began using JPMorgan’s Kinexys Digital Payments network.

The system streamlines payment workflows by identifying incoming payments, verifying amounts, and distributing funds to lenders. Tasks that previously took up to two days can now be completed in minutes.

Earlier this year, JPMorgan began accepting crypto-linked ETFs as collateral. The new program allows clients to pledge the cryptocurrencies themselves rather than ETF shares.

JPMorgan also launched its digital deposit token, “JPMD,” on Coinbase’s Base network following a June 15 trademark application. JPMD is fully backed one-to-one by U.S. dollars and is available to institutional clients only.

By July, JPMorgan had started testing a blockchain-based platform for carbon credits through Kinexys, developed with S&P Global Commodity Insights, EcoRegistry, and the International Carbon Registry.

A recent regulatory change has also allowed firms like BlackRock to accept investors’ Bitcoin and swap it for ETF shares tracking the token.

Aside from BTC and ETH-backed collaterals, the U.S. Commodity Futures Trading Commission (CFTC) unveiled an initiative to let stablecoins like USDT and USDC serve as tokenized collateral in derivatives markets.

Acting CFTC chair Caroline Pham announced on September 23 that the agency would “work closely with stakeholders” on the directive, calling it the “killer app” to modernize markets by adopting non-cash collateral.

In an exclusive interview with John Glover, Ledn’s CIO, Cryptonews asked how the demand for Bitcoin-backed loans has evolved over the past few years, and what key trends or factors influenced this change.

John Glover responded that the most fundamental factor over the past few years has been a major shift in public perception of cryptocurrencies as a legitimate financial instrument.

“The current bull run, coupled with the new administration in the U.S., which is much more pro-crypto than the previous one, and the continued influx of institutional capital and the approval of Bitcoin ETFs, have massively legitimized digital assets,” he said.

As a result, with Bitcoin being the biggest, most recognizable, and most secure crypto, it’s natural that demand for BTC-backed loans continues to grow across the board.

He added that institutional investors play a major role in turning Bitcoin-backed loans into a legitimate financial instrument.

Additionally, JPMorgan began exploring lending against Bitcoin in 2022, but the project was later shelved, said the sources, who asked not to be named because the bank’s plan is not yet public.

Since then, client demand for cryptocurrency support across Wall Street has spiked as the market has grown and regulations have eased.

Other major financial firms have also been accelerating similar offerings, and regulators’ evolving stance has helped clear a path.

Morgan Stanley, State Street, BNY Mellon, and Fidelity have recently expanded their crypto custody, trading, and product lines.

Meanwhile, legislative moves in the U.S., including work on a crypto markets structure bill, have reduced some compliance friction for banks weighing crypto exposure.

Read original story Wall Street Giant JPMorgan to Let Institutions Borrow Against Bitcoin and Ethereum Holdings by Anas Hassan at Cryptonews.com