JPMorgan's attitude has turned around, planning to launch cryptocurrency collateral loan services.
According to a report by the Financial Times, the world's largest bank, JPMorgan, is exploring loan services that directly accept customer cryptocurrencies such as Bitcoin ($BTC) and Ethereum ($ETH) as collateral, potentially launching as early as 2026. This plan symbolizes a significant policy shift for the bank in the digital asset industry and marks the first time a globally systemically important bank is directly participating in the cryptocurrency collateral loan business.
Insiders revealed that JPMorgan's cryptocurrency collateral loan plan will be implemented in phases.
The first phase has already begun, with the bank currently accepting Bitcoin ETFs (such as BlackRock's iShares Bitcoin Trust) as loan collateral.
The second phase will directly accept native cryptocurrency assets such as Bitcoin and Ethereum, but they need to be held through approved third-party custodians (like Coinbase or Anchorage).
This shift is significant for CEO Jamie Dimon. Dimon famously called Bitcoin a 'fraud' in 2017 and threatened to fire any employee trading in Bitcoin. However, in recent years, his stance has softened, stating in May this year, 'I don't think you should smoke, but I defend your right to smoke. I defend your right to buy Bitcoin.' Insiders noted that Dimon's early anti-cryptocurrency statements have caused the bank to lose some potential clients who could have profited from cryptocurrencies or had a long-term positive outlook on digital assets.
The changing regulatory environment paves the way for banks to enter the market.
JPMorgan's move comes at a time of significant changes in the U.S. cryptocurrency regulatory environment. The GENIUS Act signed by President Trump last week established a federal regulatory framework for stablecoins, requiring stablecoins to be 100% backed by dollars or other highly liquid assets. The Federal Reserve revised related regulations in April this year, removing the requirement for banks to obtain explicit approval to engage in cryptocurrency activities, allowing banks to offer cryptocurrency services as long as they can maintain safety and compliance standards.
Despite the Basel III banking industry rules imposing a punitive risk weight of 1,250% on cryptocurrency exposure, analysts believe JPMorgan's participation may signal progress in the evolution of these rules.
Ganesh Mahidhar, an investment professional at Further Ventures, stated that Bitcoin's Sharpe ratio over the past four years has been higher than that of the S&P 500 index, indicating a better risk-adjusted return.
Wall Street banks are competing for positioning as cryptocurrency becomes a mainstream trend.
JPMorgan's actions reflect a broad shift in Wall Street's attitude toward cryptocurrencies. The bank is actively positioning itself in the stablecoin industry, and Dimon stated earlier this month that the bank will 'participate in JPMorgan deposit tokens and stablecoins to understand and excel at it.' Additionally, JPMorgan plans to launch a deposit-based token $JPMD on the Base blockchain.
Competitors are also accelerating their entry into the cryptocurrency industry. Morgan Stanley is reportedly considering offering cryptocurrency trading services through its E*Trade platform, while Citigroup CEO Jane Fraser confirmed that the bank is 'actively exploring' the issuance of Citigroup-branded stablecoins for cross-border payments.
Further Reading
Citigroup CEO: Considering issuing stablecoins and tokenized deposits! Is the era of banking crypto war approaching?
Bank of America considers entering the stablecoin market! Reportedly collaborating with JPMorgan and Citigroup, just waiting for legislative clarity.
According to data from Galaxy Research, as of March, the total lending volume of centralized and decentralized platforms has exceeded $31 billion. If we include the issuance of cryptocurrency-backed stablecoins, this figure will reach $39 billion. This marks a significant rebound from the low point of $9.6 billion at the end of 2022, reflecting the recovery of institutional and on-chain lending demand.
JPMorgan predicts the stablecoin market will reach $500 billion by 2028. Once the bank's cryptocurrency collateral loan plan is implemented, it will further promote the integration of digital assets and traditional finance.
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'JPMorgan will launch BTC and ETH loans next year! Once a fierce critic, now aggressively positioning?' This article was first published in 'Crypto City.'
