JPMorgan to Let Clients Use Bitcoin and Ether as Collateral for Loans

JPMorgan Chase & Co. is reportedly working to enable its institutional clients to use Bitcoin and Ethereum as collateral for loans. This initiative represents a significant leap in the integration of cryptocurrency into Wall Street’s lending systems and is anticipated to launch by the end of 2025. According to reports, the program will utilize a third-party custodian to safeguard these crypto assets, allowing clients to leverage their digital tokens without direct custody by the bank. This move follows JPMorgan's previous decision to recognize crypto exchange-traded funds (ETFs) as collateral, broadening its policy to include underlying digital assets. Experts note that the incorporation of cryptocurrencies into traditional banking involves new, complex dynamics, such as managing volatility and liquidity. By allowing cryptocurrencies to be treated akin to traditional assets like real estate or vehicles in loan assessments, JPMorgan may be positioning itself at the forefront of a rapidly evolving financial landscape. This shift aligns with a broader trend among U.S. banks seeking to adapt to the growing influence of digital assets within lending and investment practices.

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