JPMorgan Chase & Co. has begun accepting Bitcoin and Ethereum as collateral for loans from large-scale clients. This marks the first time a U.S. bank with an institutional-grade rating has allowed actual cryptocurrencies from a U.S. corporate client, rather than derivatives or ETFs. The move is seen as a significant step toward institutional adoption of digital assets.
JPMorgan's new collateral program enables institutional investors to secure loans using Bitcoin without liquidating their holdings. The system operates through a third-party custodian, keeping pledged digital assets segregated from the bank's operations. This builds on the bank's prior acceptance of crypto-linked exchange-traded funds as collateral, but now permits direct use of the assets themselves.
A JPMorgan spokesperson stated, “Digital assets have matured to the point where they can support secured credit transactions,” emphasizing the advancement in crypto market infrastructure. Following Bitcoin's inclusion, Ethereum has also been added to the lending framework, allowing clients to borrow against Ether while retaining exposure to its value.
This development positions Ethereum as a recognized financial asset alongside traditional ones like gold, cash, and equities in global credit markets. Analysts describe it as “the most bullish signal of the year” for both cryptocurrencies, potentially encouraging other major banks such as Morgan Stanley and BNY Mellon to adopt similar practices.
At the time of the announcement, Bitcoin was trading at around $110,000, representing more than 680% growth from its 2022 low, while Ethereum stood at about $3,900. The initiative is expected to unlock new liquidity channels, bridging decentralized finance innovations with Wall Street's credit systems, especially as institutional money may return with Federal Reserve interest rate cuts.