Author
Hongji Feng
Author
Hongji Feng
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Key Takeaways:
- JPMorgan will allow select clients to borrow against crypto ETFs, starting with BlackRock’s iShares Bitcoin Trust.
- Digital asset holdings will now count toward a client’s net worth in credit assessments.
- JPMorgan CEO Jamie Dimon remains skeptical of Bitcoin but supports offering client access.
JPMorgan Chase & Co. will allow select trading and wealth clients to use cryptocurrency exchange-traded funds (ETFs) as collateral for loans, according to a report by Bloomberg published on June 4.
The bank will begin with BlackRock’s iShares Bitcoin Trust (IBIT) and plans to expand access to other funds after the rollout. The change applies to clients across wealth brackets and marks a shift in how digital assets are factored into credit decisions.
JPMorgan CEO Balances Skepticism and Demand
According to people familiar with the matter, JPMorgan will also start including clients’ crypto holdings when evaluating their overall net worth and liquid assets. That treatment will align digital assets with other categories, such as equities, vehicles, or artwork, when assessing borrowing capacity.
The offering implies internal changes to the bank’s collateral framework, which previously handled crypto ETF-backed loans on a limited basis.
The firm was among the first large U.S. banks to adopt blockchain for institutional payment infrastructure and currently serves major crypto clients, including Coinbase. CEO Jamie Dimon has maintained skepticism toward digital currencies but acknowledged customer demand.
“I don’t think we should smoke, but I defend your right to smoke,” Dimon said at an investor event in May. “I defend your right to buy Bitcoin, go at it.”
Crypto ETFs Begin to Shape Traditional Credit Infrastructure
The updated policy arrives as rival banks, including Morgan Stanley, prepare to expand digital asset services in response to client demand and easing regulatory pressure. Spot Bitcoin ETFs have overseen roughly $128 billion in assets since their U.S. launch in early 2024.
The integration of crypto ETFs into traditional lending frameworks is a structural change in how financial institutions account for digital assets. It shifts these products from speculative instruments toward tools that influence credit and liquidity decisions across client segments.
However, the broader integration of digital assets into credit systems could pressure global regulators to harmonize standards around custody, valuation, and systemic exposure, particularly if crypto-backed lending becomes a recurring feature in private wealth and institutional finance.
Frequently Asked Questions (FAQs)
Lenders would need liquidation mechanisms for ETFs holding volatile assets. Handling redemptions or sales during sharp market moves could introduce operational complexity and affect fund stability.
Wealth advisors may need to develop new models for advising clients with substantial crypto exposure, especially as such holdings begin to influence lending, tax planning, and portfolio diversification strategies.
Possibly. As ETFs move into credit markets, regulators may impose tighter rules around asset quality, liquidity provisions, or redemption policies to protect lenders and financial stability.
