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JPMorgan allows using bitcoin and ethereum as collateral for loans

SUMMARY

JPMorgan Chase is set to allow institutional clients to use Bitcoin and Ethereum as collateral for loans by the end of 2025. This plan will utilize a third-party custodian to hold the cryptocurrencies, marking a significant integration of digital assets into traditional finance.

The scheme builds on JPMorgan's previous acceptance of cryptocurrency exchange-traded funds as collateral. According to experts, this adaptation indicates a shift towards accommodating cryptocurrencies within the banking system, facing challenges such as volatility and liquidity.

Banks will need new frameworks for managing risks associated with crypto assets. As U.S. banks continue to incorporate digital assets into lending strategies, JPMorgan's move reflects broader trends already seen in the industry.


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