JPMorgan to accept BTC, ETH as loan collateral for institutional clients

Delaware-incorporated investment banking giant JPMorgan Chase could soon allow institutional clients to use Bitcoin and Ethereum holdings as collateral for loans by the end of the year, according to a Bloomberg report citing people familiar with the matter. 

JPMorgan’s upcoming program will reportedly enable clients to pledge Bitcoin and Ether directly as security for loans, safeguarded by a third-party custodian, which will separate the borrower’s assets and those on the bank’s balance sheet. 

This follows its previous move to accept crypto-linked exchange-traded funds (ETFs) as collateral earlier this year, in tandem with the regulatory clarity aided by the Trump administration. 

American Bank turns to crypto after CEO changes sentiment

The 1871-founded financial firm was once skeptical about crypto investments, but has now grown more confident, dipping its toes in the industry to join several financial institutions backing digital currency services.

JPMorgan Chase chief executive Jamie Dimon was once Wall Street’s most prominent critic of Bitcoin. He has previously labeled the king coin a “hyped-up fraud” and even compared it to a “pet rock.” Dimon’s tone has softened in recent years due to how institutional interest in digital assets has accelerated.

“I don’t think we should smoke, but I defend your right to smoke,” Dimon said at JPMorgan’s investor conference in May. “I defend your right to buy Bitcoin, go at it.”

JPMorgan’s new program comes on the heels of legacy financial institutions deepening their exposure to digital assets. A more favorable regulatory environment under US President Donald Trump’s government has contributed to the sentiment shift. 

Republican policymakers have been fronting laws to promote innovation, while simultaneously easing restrictions on crypto-related activity imposed by former POTUS Joe Biden’s administration. 

Several other Wall Street firms, including Morgan Stanley, State Street, BNY Mellon, and Fidelity, have announced advancements in crypto custody, trading, or product lines in recent months. 

As covered by Cryptopolitan, in early October, Morgan Stanley informed its financial advisors that it would expand access to crypto investments across all client segments, removing previous restrictions that had limited opportunities to high-net-worth individuals.

Advisors are now allowed to issue crypto-focused funds to any client, including those with retirement accounts. The bank’s earlier policy had confined crypto exposure to clients with at least $1.5 million in assets, an aggressive risk profile, and a taxable brokerage account.

JPMorgan to use AI in financial infrastructure

Beyond its growing acceptance of crypto, JPMorgan executives alluded that the bank is going through a “fundamental transformation” to include artificial intelligence in its digital finance infrastructure. 

The company has launched a portal known as LLM Suite, equipped with the capabilities of large language models developed by top AI startups.

According to Derek Waldron, JPMorgan’s chief analytics officer, the platform uses models from OpenAI and Anthropic to assist with research, document analysis, and workflow automation in the bank’s major divisions. 

Every eight weeks, LLM Suite is reportedly updated with fresh data drawn from the bank’s extensive internal databases and software systems. 

“The broad vision that we’re working towards is one where the JPMorgan Chase of the future is going to be a fully AI-connected enterprise. There is a value gap between what the technology is capable of and the ability to fully capture that within a company,” Waldron told CNBC.

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