Banking giant JPMorgan (NYSE: JPM) is reportedly preparing to accept cryptocurrency-linked assets, including Bitcoin (BTC) exchange-traded funds (ETFs), as loan collateral.
The bank will initially offer financing against crypto ETFs, beginning with BlackRock’s iShares Bitcoin Trust, Bloomberg reported on June 4.
This move marks a significant expansion of JPMorgan’s crypto-related offerings and comes at a time of broader regulatory easing under the new U.S. administration.
Previously, JPMorgan accepted such collateral on a limited, case-by-case basis. However, under the new plan, crypto ETFs will be treated more like traditional assets, such as stocks or real estate, when evaluating a client’s borrowing capacity.
The report also noted that the initiative, expected to launch in the coming weeks, will likely include additional cryptocurrency investment products.
Crypto in wealth management
Moreover, JPMorgan plans to factor cryptocurrency holdings into wealth-management clients’ net worth and liquidity assessments. This could substantially increase borrowing power for clients with significant crypto exposure held through regulated investment vehicles.
Notably, this isn’t the first time the institution has tapped into blockchain technology. JPMorgan’s blockchain division, rebranded as Kinexys, is focused on delivering scalable solutions.
Interestingly, this strategic pivot comes despite the bank’s CEO, Jamie Dimon, remaining one of Bitcoin’s most vocal critics. While Dimon has publicly dismissed Bitcoin as a “fraud” and “not a real thing” with no intrinsic value, he has acknowledged that he’s open to supporting clients who wish to invest in the asset.
“I don’t think we should smoke, but I defend your right to smoke. <…> I defend your right to buy Bitcoin, go at it,” Dimon said.
Meanwhile, Bitcoin is yet to make a significant move on the news, with the asset largely remaining in consolidation. As of press time, BTC was trading at $105,252, down 0.7% in the last 24 hours.
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