Even as CEO Jamie Dimon continues to mock Bitcoin as a “pet rock,” his bank is preparing to treat it as a legitimate financial instrument. According to reports, JPMorgan’s crypto collateral program will allow institutional clients to pledge Bitcoin (BTC) and Ether (ETH) as collateral for loans by the end of 2025. The plan represents a global initiative that will rely on third-party custody of the pledged assets. It’s an extension to the bank’s existing practice of accepting crypto-linked ETFs as collateral.
For Wall Street, this is another clear step toward mainstream integration of digital assets within traditional finance.
From Crypto Scepticism to Strategic Adoption
Jamie Dimon’s stance on Bitcoin has been unambiguous for years. He has repeatedly called it “worthless,” a “pet rock,” and, in 2017, even a “fraud.” Yet while Dimon’s personal view remains sceptical, JPMorgan has steadily expanded its blockchain and digital-asset infrastructure.
- 2019 – JPM Coin: a permissioned stablecoin for interbank settlements.
- 2023 – Onyx blockchain: JPMorgan’s proprietary network for tokenized deposits and securities.
- 2024 – ETF collateral pilot: the bank’s first step toward integrating digital exposure into its credit framework.
Now, moving from ETFs to the underlying assets, JPMorgan is formalizing direct crypto collateral as part of its lending operations. Clearly, this is a major normalization milestone for the industry.
How JPMorgan’s Crypto-Collateral Model Works
Under the new program, eligible institutional clients, including hedge funds, corporates, and asset managers, will be able to post Bitcoin or Ether as collateral for loans and credit facilities. The assets will be held by an independent, third-party custodian, segregated from JPMorgan’s balance sheet. This structure mitigates counterparty and operational risk, aligning with the Basel III approach to digital-asset exposure.
Collateral will be marked to market daily, and conservative margin requirements will be applied to account for volatility. The design mirrors traditional collateralized lending; only now, with blockchain assets.
Meanwhile, JPMorgan will initially restrict participation to clients that already meet its highest credit and compliance standards. The framework expands upon JPMorgan’s earlier ETF collateral model. The bank is moving one step closer to full-scale integration of digital assets in regulated credit markets.
>>> Read more: Jamie Dimon Greenlights Bitcoin Investment at JPMorgan
A Signal of Crypto’s Normalization
When a bank of JPMorgan’s scale adopts crypto as eligible collateral, it’s more than an internal update. It’s a public signal that digital assets have reached a new level of institutional legitimacy.
Other major banks, including Goldman Sachs, BNY Mellon, and Citi, have advanced digital-asset custody or tokenization projects. But JPMorgan’s plan to recognize Bitcoin and Ether collateral in loan structures goes a step further. It embeds crypto directly into the banking credit system.
It shows that crypto assets are being treated less like speculative instruments and more like financial infrastructure. They are tradable, collateralizable, and risk-weighted within traditional models.
The Sceptic Whose Bank Embraced Crypto
Jamie Dimon’s ongoing criticism of Bitcoin remains part of his public persona. At the World Economic Forum in Davos in early 2024, he called Bitcoin “a pet rock that does nothing.” Earlier in 2017, he called it a fraud and claimed he would fire any employee trading it. Yet under his leadership, JPMorgan has:
- Launched JPM Coin for institutional settlements.
- Built the Onyx blockchain to tokenize assets and payments.
- Announced a crypto collateral program for institutional clients.
The contrast illustrates a broader trend on Wall Street: banks are pragmatically engaging with digital assets even as their leaders remain personally sceptical.
From ETF Collateral to On-Chain Finance
JPMorgan’s 2024 ETF-collateral pilot proved that crypto exposure could coexist within regulated credit frameworks. The next step, allowing Bitcoin and Ether collateral, suggests that custody, valuation, and compliance systems have matured enough to handle direct digital-asset exposure.
The move also complements JPMorgan’s broader blockchain ecosystem. The Onyx platform already supports tokenized repos and payments, while the bank’s Tokenized Collateral Network (TCN) enables real-time collateral transfers over blockchain rails.
This program effectively brings those tools together, creating the technical and regulatory foundation for on-chain collateralization at the world’s largest bank.
Implications for Institutions and Liquidity
In practical terms, this means crypto is entering the same playbook as gold and treasuries.
- Broader collateral options free up traditional assets like treasuries.
- Leverage without liquidation becomes possible for crypto positions.
- Operational efficiency improves through tokenized settlement networks.
For crypto markets, it introduces steady institutional demand, not for trading, but for using BTC and ETH in structured lending. For regulators, it underscores the need to finalize digital-asset capital and liquidity frameworks under global Basel III guidelines.
The move doesn’t make Bitcoin risk-free. But it does make it a bank-recognized and risk-managed asset.
>>> Read more: JPMorgan Coinbase Partnership Brings Crypto to Chase
Outlook: The New Baseline for Crypto in Banking
JPMorgan’s crypto collateral program is expected to launch globally by the end of 2025, subject to regulatory and operational milestones. If successful, it could open the door to additional tokenized assets and future integration with stablecoins and deposit tokens.
Competitors are likely to follow, replicating the model across global credit markets. This will further accelerate Wall Street’s crypto adoption, turning blockchain assets into a standard component of institutional finance.
Crypto’s normalization, in the end, isn’t about Jamie Dimon changing his mind. It’s about the financial system changing its architecture. When the most traditional bank on Wall Street treats Bitcoin and Ether as legitimate collateral, the rest of finance takes notice.
Readers’ frequently asked questions
When will JPMorgan launch the crypto collateral program?
According to Bloomberg and CoinDesk, JPMorgan plans to launch its crypto collateral program by the end of 2025. The rollout will initially focus on institutional clients and expand globally once regulatory and operational benchmarks are met.
Who can participate in JPMorgan’s crypto collateral program?
The program is limited to institutional clients such as hedge funds, asset managers, corporates, and other professional investors who already meet JPMorgan’s highest compliance and credit standards.
How will the crypto assets be custodied?
The pledged Bitcoin and Ether will be held by an independent, third-party custodian under a segregated arrangement. This structure ensures that JPMorgan does not take direct custody of client crypto assets, aligning with Basel III regulatory guidelines for digital-asset exposure.
What Is In It For You? Action items you might want to consider
Follow institutional adoption trends
Monitor how banks and financial institutions respond to JPMorgan’s crypto collateral program. Similar initiatives by Goldman Sachs or Citi could accelerate mainstream use of Bitcoin and Ether in credit markets.
Review crypto custody options
As collateralization becomes institutionalized, ensure you understand how third-party custody works. Evaluate regulated custodians and their insurance coverage before using crypto as collateral in any lending arrangement.
Assess long-term impact on crypto liquidity
Crypto used as collateral could reduce circulating supply and impact volatility. Keep track of on-chain liquidity metrics and lending demand for BTC and ETH to anticipate shifts in market behavior.
