JPMorgan’s Big Move: Bitcoin and Ethereum Can Now Back Bank Loans

In a major step toward bridging traditional finance and cryptocurrency, JPMorgan Chase has announced a new program that will allow certain institutional clients to use Bitcoin (BTC) and Ethereum (ETH) as collateral for loans. This marks one of the first times a major U.S. bank has accepted digital assets as security for lending, signaling that the gap between banks and blockchain is beginning to close.

According to a report on October 24, 2025, JPMorgan will begin testing this program later this year through its Onyx blockchain platform. This system will let high-net-worth individuals and corporate clients borrow money or access credit lines by pledging Bitcoin or Ethereum instead of traditional assets like stocks, bonds, or property.

Because cryptocurrencies are more volatile than traditional assets, JPMorgan will apply “haircuts” a term that means reducing the asset’s value to account for possible price swings. For example, if Bitcoin is worth $100,000, the bank might treat it as worth only $70,000 when deciding how much to lend. This helps protect the bank from sudden price drops.

Here’s a simple way to understand it:

This new system builds on JPMorgan’s earlier blockchain work. In 2024, the bank launched a tokenized money market fund that quickly grew to $1 billion in assets. The new crypto collateral plan expands that innovation, showing the bank’s growing confidence in blockchain’s potential.

JPMorgan’s CEO, Jamie Dimon, was once openly skeptical of cryptocurrency, even calling Bitcoin “worthless” years ago. However, his stance has evolved. He now describes this new initiative as a “measured evolution” in finance, highlighting the importance of risk control and real-time asset monitoring.

Under this setup, the bank can automatically check the value of pledged crypto and liquidate assets if prices drop too much, similar to how some decentralized finance (DeFi) platforms already operate.

This move could reshape how banks and businesses view digital assets. Traditionally, cryptocurrencies were seen as too unstable to be used in major financial systems. Now, one of the world’s largest banks is treating them as legitimate financial tools. If successful, this program could open the door for a much broader crypto-collateral lending market. Analysts estimate that crypto-backed loans could reach $500 billion globally by 2026, especially if other financial institutions follow JPMorgan’s lead. For the $100 trillion global lending market, using crypto as collateral can also make transactions faster and cheaper. Blockchain technology enables near-instant settlements, compared to the usual waiting period of several days for traditional asset transfers.

The announcement has created excitement across crypto communities. Many see this as a turning point for mainstream adoption. Online discussions are filled with optimism that major banks finally recognize the real-world value of digital assets. However, others remain cautious. Critics argue that the required “haircuts” might discourage borrowers, as they limit how much can be borrowed against the crypto. There are also concerns that price volatility could still pose risks if markets turn unstable. Despite these concerns, supporters believe JPMorgan’s blockchain-based risk controls make this experiment safer than earlier attempts at integrating crypto with banking.

A Major Step Toward Bitcoin, Ethereum and Banking Integration

The pilot program will start by the end of 2025, focusing on a select group of institutional clients. If results are positive, JPMorgan could expand it to include more participants and larger loan sizes in 2026. Many experts believe that this step could help push crypto assets, especially Bitcoin and Ethereum closer to being treated like traditional financial instruments. If banks can successfully manage risk, it may encourage more institutions to use crypto in lending, trading, and asset management.

In short, JPMorgan’s new policy shows how traditional finance and crypto are beginning to merge. It’s a cautious experiment, but one that could redefine how value moves across global markets. Whether this becomes a long-term success or a short-lived trial will depend on how well the system handles volatility and regulatory scrutiny in the months ahead.