Plans to Offer Loans Backed by Bitcoin

According to Financial Times, Wall Street giant JPMorgan Chase is planning to launch digital-asset-backed loans, a big change in how traditional banks view bitcoin.

According to the report, JPMorgan will let clients borrow money using their digital asset holdings— namely bitcoin (BTC) and ethereum (ETH)—as collateral. If approved, the bank will roll this out next year.

Other big U.S. banks, Bank of America and Citibank, are also exploring digital asset products. The wave of interest from Wall Street has been driven by a more digital-asset-friendly regulatory environment under the Trump administration, which is back in office.

This is especially notable given JPMorgan CEO Jamie Dimon’s long history of skepticism towards Bitcoin. In 2017, he called Bitcoin a “fraud” and even threatened to fire employees who traded it. He doubled down on his criticism over the years, at one point calling it a “Ponzi scheme”.

But Dimon’s tone has softened recently. In May, he said: “I don’t think you should smoke, but I defend your right to smoke. I defend your right to buy bitcoin.” He added: “We’re going to allow you to buy it, we’re not going to custody it.”

This “hands-off” approach means JPMorgan won’t hold bitcoin on its balance sheet. Instead, they will work with third-party custodians, like Coinbase, to manage the assets used as collateral for loans.

JPMorgan already lets clients borrow against bitcoin ETFs, like BlackRock’s iShares Bitcoin Trust (IBIT). But this new plan will go a step further and allow lending against actual bitcoin holdings—something most big banks have avoided due to the complexity and risk involved.

A new complexity rises with this new service. If a client uses their bitcoin or ethereum as collateral for a loan and can’t repay, the bank will have to seize and sell the digital assets. That creates technical and regulatory challenges, including how to manage these assets safely and legally.

They will use custodians who have experience in managing digital assets, but money laundering and regulatory risks remain notable.

JPMorgan is getting in on the digital assets action amid increased regulatory approvals in Washington—especially around stablecoins, which are digital currencies pegged to traditional fiat currencies like the U.S. dollar.

U.S. President Donald Trump recently signed the GENIUS Act—a bill to regulate stablecoins—into law, and now banks have more clarity to engage with them. This clarity has encouraged financial institutions to explore digital asset services that were once too risky.

Jamie Dimon is still cautious but said JPMorgan will get more involved in stablecoins. He added he wants to “understand it” and “be good at it.”

The bank’s size and reputation—with over $4.3 trillion in assets under management—will give legitimacy to bitcoin-based financial services and attract more institutional clients who want to borrow against their bitcoin without selling it.

The plans are still under discussion and subject to change, but multiple sources report JPMorgan could launch the service as early as 2026 or sooner depending on how the regulatory environment evolves.