Cryptocurrency joins mainstream assets as JPMorgan (JPM.US) plans to accept it as loan collateral.

JPMorgan Chase (JPM.US) plans to allow institutional clients to use their holding of Bitcoin and Ethereum as collateral for loans by the end of the year, marking a significant increase in Wall Street's integration into the realm of cryptocurrency. According to sources, the plan will be implemented globally and the tokens pledged will be held by third-party custodians. The plan is based on JPMorgan's previous initiative of accepting exchange-traded funds related to cryptocurrencies as collateral. This expansion indicates that cryptocurrencies are being rapidly incorporated into the core architecture of the financial system. As the price of Bitcoin continues to rise this year and the Trump administration relaxes regulatory restrictions, major banks are starting to integrate digital assets more deeply into the loan system. For JPMorgan Chase, this is both a symbolic and substantive shift. CEO Jamie Dimon, who previously dismissed Bitcoin as "a fraud" or "a pet rock being too promoted," no longer considers cryptocurrencies as fringe investment choices. Instead, they will be used as collateral for loans, just like stocks, bonds, gold, and other common assets. Recently, Dimon's attitude has softened, but he remains cautious. At a JPMorgan investor conference in May, he stated, "I don't smoke, but I support your right to smoke. I support your right to buy bitcoin, buy stuff, do whatever." JPMorgan is not the only longstanding Wall Street firm actively entering the digital asset space recently. The Trump administration's supportive stance on cryptocurrencies and subsequent relaxation of related regulations have made these companies more willing to take on associated risks. For example, Morgan Stanley (MS.US) plans to allow customers of its E*Trade retail platform to use popular cryptocurrencies starting from the first half of next year. Other companies getting involved include State Street Corporation (STT.US), New York TrustCo Bank Corp NY (BK.US), and Fidelity, offering services such as cryptocurrency custody. A recent regulatory adjustment has also allowed institutions like BlackRock, Inc. (BLK.US) to accept investors' Bitcoin and convert it into shares of exchange-traded funds (ETFs) that track the token. Sources say that JPMorgan began exploring the use of Bitcoin as collateral for loans for the first time in 2022, but the project was later shelved. Since then, with the development of the market and the relaxation of regulations, there has been a significant increase in demand from Wall Street institutions for services supporting cryptocurrencies. Rules regarding cryptocurrencies have already taken effect in regions such as the EU, Singapore, and the UAE, while legislation to regulate the structure of the cryptocurrency market is currently under consideration in the US Congress. Despite a recent significant market downturn, Bitcoin reached a historical high of $126,251 earlier this month.