JPMorgan Weighs Bitcoin and Ethereum-Backed Loans in Major Policy Shift

JPMorgan, the largest U.S. bank by total assets, is reportedly exploring a plan to let clients borrow cash directly against Bitcoin (BTC) and Ethereum (ETH). According to a Financial Times report on Tuesday, the proposal would mark a significant departure from the bank’s current approach, which only allows crypto-related products like exchange-traded funds (ETFs) as collateral.

If implemented, this policy could position JPMorgan ahead of rivals such as Goldman Sachs, which have yet to introduce direct crypto-backed lending services. Allowing customers to pledge BTC and ETH as collateral could enhance the bank’s competitiveness in the rapidly evolving digital asset market, where institutional adoption continues to accelerate.

Bitcoin and Ethereum remain the two largest cryptocurrencies by market capitalization and are widely held by institutional and retail investors. By enabling cash loans backed by these assets, JPMorgan would tap into a growing demand for flexible financing options that leverage crypto holdings without requiring liquidation.

The move also reflects a broader shift among traditional financial institutions toward integrating digital assets into their services. While regulatory uncertainty remains a hurdle, increased client demand for crypto-based products is pushing banks to explore innovative offerings.

Analysts say this development could further legitimize crypto within mainstream finance, potentially influencing market sentiment and adoption trends. If JPMorgan proceeds, it would represent one of the most notable endorsements of cryptocurrency collateralization by a major global bank to date.