The largest bank in the United States by assets and market cap, JPMorgan Chase, is set to expand its services by allowing clients to use spot Bitcoin exchange-traded funds (ETFs), including BlackRock’s iShares Bitcoin Trust (IBIT), as collateral for financing.
This development, reported by Bloomberg on June 4, marks a significant shift in the bank’s approach to cryptocurrency, reflecting a growing acceptance of regulated digital assets within mainstream finance.
JPMorgan’s New Lending Policy
The new policy will apply globally, catering to both retail and institutional clients. By recognizing clients’ holdings in crypto ETFs as part of their net worth and liquidity calculations, JPMorgan is positioning these assets alongside traditional investments like stocks and real estate in eligibility assessments.
This move represents a departure from the bank’s previous case-by-case approach and aligns it with similar initiatives undertaken by competitors such as Morgan Stanley.
This shift comes at a time when the regulatory environment in the US is evolving. Since the approval of spot Bitcoin ETFs in January 2024, these funds have collectively amassed over $128 billion in assets, making them among the most successful ETF launches in the country’s history.
JPMorgan’s CEO, Jamie Dimon, has historically been skeptical of Bitcoin, having expressed doubts about its legitimacy and safety. Just last month, he began offering clients access to the cryptocurrency, a notable change in stance.
During the firm’s investor day in May, Dimon remarked, “I don’t think we should smoke, but I defend your right to smoke. I defend your right to buy Bitcoin. Go at it.”
Concerns About Bitcoin Persist
Despite this progressive step, Dimon reiterated his concerns about Bitcoin, citing issues related to money laundering and the lack of clear ownership. He has previously linked BTC to criminal activities, stating, “Bitcoin has been associated with the sex trafficking and terrorism,” indicating his belief that its main uses are problematic.
His skepticism has been evident in past statements, where he labeled BTC as “worthless” and dismissed it as “the pet rock” during the World Economic Forum in Davos.
The context for JPMorgan’s recent decision is shaped by a changing regulatory landscape in the US Since the election of President Donald Trump, regulatory bodies like the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have softened their anti-crypto stance, granting banks greater flexibility in their dealings with digital assets.
While JPMorgan does not currently provide custody or execution services for crypto ETFs, this new lending policy positions the bank to meet the increasing institutional demand for digital asset integration.
It reflects a broader trend within the industry, as banks transition from maintaining zero exposure to exploring innovative ways to incorporate digital assets into their services.
Featured image from DALL-E, chart from TradingView.com
