JPMorgan eyes $1B crypto-backed loans – Dimon’s BTC reversal unlocks $1B opportunity

JPMorgan Chase, America’s largest bank, is quietly laying the groundwork to offer crypto-backed loans by 2026, according to a Financial Times report citing unnamed sources.

The move would allow clients to borrow against Bitcoin ($118,397) and Ethereum ($3,668) holdings—a stark departure from CEO Jamie Dimon’s infamous 2017 description of Bitcoin as a “fraud.”

The bank’s exploration of crypto-backed loans aligns with its broader push into stablecoins, which Dimon endorsed during a July 15 earnings call.

“We plan to be involved in [stablecoins] to understand it and be good at it,” he said, just days after rival Citigroup hinted at its own stablecoin ambitions.

From skepticism to strategy: Dimon’s crypto evolution

Dimon’s past hostility toward crypto is well-documented. In 2017, he threatened to fire JPMorgan employees trading Bitcoin, later labeling it a “scam” (2018) and a “decentralized Ponzi scheme” (2022). Yet his recent pragmatism—pledging to let clients buy Bitcoin (though not custody it)—reflects Wall Street’s unavoidable reckoning with crypto’s $2.3 trillion market.

“Dimon’s earlier anti-Bitcoin comments alienated potential crypto-native clients,” an anonymous source told the FT. “Now, the bank is playing catch-up.”

The pivot to crypto-backed loans could help JPMorgan retain high-net-worth clients who demand exposure to digital assets. As Goldman Sachs and BNY Mellon expand crypto services, JPMorgan risks losing market share without competitive products.

Why crypto-backed loans matter for traditional finance

Crypto-backed loans let borrowers use digital assets as collateral without selling them—a feature appealing to long-term holders. If approved, JPMorgan’s program would follow similar offerings by BlockFi (before its 2022 collapse) and newer entrants like Coinbase and Nexo.

However, risks persist. Volatility could force margin calls if collateral values plummet, and regulators remain wary.

“Banks must ensure robust risk frameworks for crypto-backed loans,” said Sarah Hammer, managing director of the Wharton School’s Crypto Asset Project. “The SEC and OCC will scrutinize these models closely.”

Stablecoins: The quiet driver of JPMorgan’s crypto shift

The crypto-backed loans plan complements JPMorgan’s stablecoin experiments, including its JPM Coin system for institutional payments. Dimon’s recent comments suggest the bank views stablecoins—not Bitcoin—as the gateway to blockchain adoption.

“Stablecoins are the Trojan horse for traditional finance,” remarked Lex Sokolin, head economist at ConsenSys. “Once banks control the rails, they can layer in riskier products like crypto-backed loans.”

Key takeaways

• JPMorgan’s potential crypto-backed loans would launch by 2026, per FT sources.

• CEO Jamie Dimon has shifted from calling Bitcoin a “fraud” to greenlighting client access.

• Regulatory hurdles and market volatility remain challenges for crypto-backed loans.

• The bank’s stablecoin push signals a broader institutional embrace of blockchain infrastructure.