JPMorgan to offer crypto-backed loans using Bitcoin and Ether

JPMorgan Chase plans to allow institutional clients to use Bitcoin and Ether holdings as collateral for loans by the end of this year, people familiar with the matter said, in a move that further integrates major cryptocurrencies into traditional banking services. The global program will rely on a third party custodian to hold pledged tokens and follows the bank's earlier step of accepting crypto-linked exchange-traded funds as collateral.

Officials and industry contacts said the initiative is intended to let trading, wealth-management and other institutional customers unlock liquidity without selling digital-asset positions. The bank first explored lending against Bitcoin in 2022 and shelved the effort at the time, they said, but renewed client demand and a maturing regulatory environment have accelerated the relaunch. A JPMorgan spokesperson declined to comment.

Under the planned framework, clients would pledge Bitcoin or Ether as security for loans in a similar way to using stocks, bonds or gold, with operational safeguards routed through an independent custodian. Details such as eligible asset criteria, loan-to-value ratios and collateral haircuts have not been disclosed...