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Bitcoin News Update: Wall Street's Crypto Strategy: JPMorgan's Collateral Decision Stirs Friction with Traditional Systems

Bitcoin News Update: Wall Street's Crypto Strategy: JPMorgan's Collateral Decision Stirs Friction with Traditional Systems

Bitget-RWA2025/10/24 14:24
By: Bitget-RWA
- JPMorgan will let institutional clients use Bitcoin and Ethereum as loan collateral by year-end, advancing digital asset integration in traditional finance. - Major banks like Morgan Stanley and Fidelity are expanding crypto offerings, reflecting rising institutional demand for digital assets. - JPMorgan’s CEO, Jamie Dimon, now permits BTC purchases but avoids custody, while volatility and rehypothecation risks persist. - Swiss and U.S. banks, including Goldman Sachs, are adopting crypto-collateralized l

JPMorgan Chase & Co. plans to permit institutional clients to use

and as collateral for loans by the end of this year, representing a significant milestone in merging digital assets with mainstream banking. This initiative, which will be available worldwide and utilize third-party custodians to secure the pledged cryptocurrencies, expands on the bank’s previous acceptance of crypto-related ETFs as loan collateral, according to . With this step, joins an increasing number of major financial players—such as Morgan Stanley, State Street, and Fidelity—who are broadening their crypto services, as highlighted by .

This move signals growing institutional interest in cryptocurrencies and reflects a broader transformation in Wall Street’s attitude toward digital assets. JPMorgan’s CEO, Jamie Dimon, who was once openly critical of Bitcoin, has recently relaxed his position, now allowing clients to buy

while still insisting the bank will not provide custody, as reported by crypto.news. The bank’s change in approach comes amid more favorable regulations under the current administration and a dramatic rise in Bitcoin’s value, which reached new peaks in 2025, according to Coindesk.

Bitcoin News Update: Wall Street's Crypto Strategy: JPMorgan's Collateral Decision Stirs Friction with Traditional Systems image 0

This updated collateral policy will let clients access liquidity by leveraging their crypto assets without selling them, which could increase demand for BTC and

among investors with long-term holdings, according to crypto.news. However, this approach also brings new challenges. Unlike conventional assets such as gold or government bonds, cryptocurrencies are traded around the clock and are highly volatile, making risk management more complex for banks, as noted by . Samuel Patt, co-founder of the Bitcoin metaprotocol OP_NET, pointed out that bringing crypto into established financial systems creates “fundamental tension,” since Bitcoin was originally designed to remove counterparty risk, not to be reused as collateral in traditional finance, as explained in .

JPMorgan’s strategy builds on its growing digital asset infrastructure, including its J.P. Morgan Deposit Token (JPMD) and the Onyx blockchain platform, which handles billions in tokenized transactions, according to

. The bank also filed for a trademark related to stablecoins in June 2025, indicating its intention to strengthen its presence in the digital asset space, as BeInCrypto reported. Meanwhile, its Kinexys blockchain network has expanded into carbon trading and international payments, with daily transaction volumes now topping $2 billion.

Nonetheless, some experts warn of potential systemic dangers. Benzinga analysts argue that using volatile cryptocurrencies as collateral could create risks of contagion, as sharp price drops might lead to widespread margin calls and liquidity shortages. This concern is reminiscent of the 2022 crypto downturn, when the collapse of Celsius Network and Terra/Luna resulted in $20 billion in losses. While JPMorgan’s program is innovative, it could intensify such risks if not managed carefully.

The bank’s new direction reflects a broader shift in the industry. Swiss institutions like Luzerner Kantonalbank, Sygnum, and Swissquote have already adopted similar practices, accepting Bitcoin and crypto ETFs as collateral, according to crypto.news. In the United States, Goldman Sachs and BNY Mellon have also entered the crypto-backed lending space, while Citigroup and U.S. Bancorp are working on custody solutions, as reported by

. These developments indicate that the integration of crypto into traditional finance is now a practical reality rather than a theoretical possibility.

JPMorgan’s latest move highlights its pragmatic response to client interest, even as Dimon continues to express doubts about the value of cryptocurrencies, according to BeInCrypto. “At some point, there will be a form of digital currency,” he recently commented, though he maintains that Bitcoin lacks “intrinsic value.” For now, the bank’s actions demonstrate that Wall Street’s adoption of crypto is gaining momentum, despite ongoing concerns about unresolved risks.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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