In a dramatic change of attitude, the biggest bank in the world, JPMorgan Chase, is proposing to lend customers using Bitcoin and Ethereum as security. This follows CEO Jamie Dimon’s earlier statements labeling Bitcoin a “fraud” and threatening to terminate traders involved with the cryptocurrency. Clearer regulatory standards in the US and increasing institutional demand for crypto assets are likely the driving forces for the bank’s about-face.
Crypto lending strategy marks major pivot for JPMorgan
The biggest bank in the world may begin providing loans backed by Bitcoin and Ethereum as early as 2026, according to a recent report by the Financial Times. Having said that, those in the know have also said that intentions to lend against crypto assets can alter. This change in direction follows last week’s implementation of the Market Structure Act, often known as the CLARITY Act, which introduced transparent crypto laws.
Also, major asset managers like BlackRock and Fidelity have introduced important investment products that include top crypto assets, so conventional banking and financial institutions are starting to understand them. The trend follows earlier developments such as Fidelity’s Ethereum ETF filing and BlackRock’s Bitcoin ETF surge.
According to a source familiar with the matter, Dimon lost revenue due to the alienation of prospective customers caused by his early comments on Bitcoin, which included a warning to fire any trader trading in it. The pressure on JPMorgan to change direction is mounting as institutional belief in cryptocurrency increases. Even Jamie Dimon, head of the bank, has lowered his guard on cryptocurrency as of late.
The attitude in Washington is changing, and more and more banks are becoming comfortable with cryptocurrency. On July 22, the White House will unveil its Crypto Policy report. Some anticipate that, in contrast to President Biden’s approach, the Trump administration would implement less stringent regulatory control.
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