JPMorgan could take another step forward into the crypto sphere, opening doors for crypto assets to have real utility in the traditional banking ecosystem. The Wall Street bank is reportedly planning to accept Bitcoin and Ether as loan collateral from institutional clients.
The decision could finalize and materialize by the end of 2025, said a report by Bloomberg on Friday, October 24 that cited people familiar with the matter.
JPMorgan is likely to onboard a trusted third party custodian to safely hold the pledged assets.
If this happens, Bitcoin will join the list of elite assets like gold, stocks, and bond to qualify as a collateral-worthy asset itself. First minted in 2009, BTC is the first cryptocurrency to have come into existence. At its peak, the asset has touched an all-time-high of $126,210 earlier this year. Presently, it is trading at $110,426 with a total market cap of $2.2 trillion, as per CoinMarketCap.
The move could significantly solidify Bitcoin’s utility in the real world scenario.
It is noteworthy that in the previous years, JPMorgan CEO Jamie Dimon dismissed BTC as a “hyped up fraud”. With the recent pro-crypto policy overhaul in the U.S., however, has played a vital role in changing the sentiment around BTC among members of the core finance community.
During the bank’s investor conference in May, Dimon had reportedly said, “I don’t think we should smoke, but I defend your right to smoke. I defend your right to buy Bitcoin, go at it.”
Billionaire Michael Saylor, whose company Strategy has emerged as a massive BTC reserve in recent years, reacted to the reported development on Friday.
“Don’t wait until your banker tells you to buy Bitcoin,” Saylor posted on X, re-sharing JPMorgan’s reported plans.
The bank has gradually been exploring crypto-related partnerships to set up a position in the sector. In September, it partnered Coinbase to enable bank-to-wallet service for crypto clients.
These moves by the bank also come in alignment with President Donald Trump’s directive to U.S. banks to have a friendly stance towards the crypto sector.