JPMorgan Weighs Crypto Asset-Based Lending

Banking giant J.P. Morgan Chase is reportedly considering lending against its customers’ cryptocurrency holdings.

That’s according to a report Tuesday (July 22) from the Financial Times (FT), which calls the proposed plan the latest signal that big banks are supporting crypto’s mainstreaming. 

Such a policy, the report adds, would mark a major shift for J.P. Morgan CEO Jamie Dimon, who has called bitcoin a “fraud” only used by criminals, though he later disavowed those comments.

Now, the bank is weighing a plan that would involve lending directly against crypto assets such as bitcoin and ethereum, the FT said, citing sources familiar with the matter. 

One source told the FT that Dimon’s comments about bitcoin had alienated some prospective customers who were crypto advocates. The report said Dimon has relaxed his stance more recently based on comments made in May.

 “I don’t think you should smoke, but I defend your right to smoke. I defend your right to buy bitcoin. Go at it,” the CEO said.

The report adds that the bank has already made some moves in the crypto space, including plans to start lending against crypto exchange-traded funds.

J.P. Morgan also recently announced plans to launch a “deposit token” that will function as a digital representation of commercial bank money and will be offered only to the bank’s institutional clients. 

As covered here last week, the token — known as JPMD — would serve as a direct alternative to stablecoins, which “peg” to the dollar or a basket of currencies.

“We’re going to be involved in both J.P. Morgan deposit coin and stablecoins to understand it, to be good at it,” Dimon said on an earnings call last week.

PYMNTS reporting on this call pointed out Dimon’s skepticism on stablecoins: “I think they’re real, but I don’t know why you’d want a stablecoin as opposed to just payment.”

As the FT notes, banks have been increasingly embracing crypto as attitudes shift in Washington. While regulators cracked down on the digital assets space during the Biden administration, the Trump White House has taken a lighter touch. Last week, Congress passed a law to regulate stablecoins, the first piece of major crypto legislation.

PYMNTS wrote earlier this week about the implications of this law, arguing that the rise of stablecoins could change how global enterprises access and move money, particularly in places where “trust is scarce and banking is broken.”

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