JPMorgan Chase & Co. is preparing to allow institutional clients to use Bitcoin and Ether holdings as collateral for loans by the end of the year, according to a Bloomberg report.

The initiative will operate globally and rely on a third-party custodian to securely hold the digital assets. This marks a significant step beyond the bank’s earlier practice of accepting crypto-linked exchange-traded funds (ETFs) as collateral.

Initially, JP Morgan allowed clients to use financial products tied to the value of cryptocurrencies such as Bitcoin or Ether ETFs, as collateral for loans or other financing activities. These ETFs track the performance of crypto assets but are traded on regulated exchanges, making them easier for banks to manage under existing financial and compliance frameworks.

In essence, the bank was engaging with crypto exposure indirectly through regulated investment instruments, rather than through the direct custody or acceptance of actual digital assets. The upcoming move to accept Bitcoin and Ether themselves as collateral represents a deeper step into the crypto space, signaling greater confidence in the maturity of digital asset markets and the infrastructure supporting them.

Also, the move comes as the Bank CEO Jamie Dimon, who was once a strong critic of cryptocurrency, describing it as “fraud”, has finally softened his stance on the digital asset. Lately, Dimon has moderated his stance somewhat, while remaining skeptical. “I don’t think we should smoke, but I defend your right to smoke,” he said at JPMorgan’s investor conference in May. “I defend your right to buy Bitcoin, go at it.”

JPMorgan’s latest move comes as it opened its new global headquarters at 270 Park Avenue, marking a major milestone in its commitment to New York City. The tower will be home to 10,000 employees by the year-end.

With Bitcoin’s sustained price rally and a more accommodating regulatory environment under the current U.S. administration, JP Morgan is not the only bank exploring crypto-related services. Across the financial sector, similar developments are underway.

Recent regulatory adjustments in the United States have encouraged other banks to design digital asset services, ranging from cryptocurrency trading and wallet management to tailored investment strategies.

Here’s an overview of some of the key players and their initiatives:

Morgan Stanley

Morgan Stanley became the first major U.S. bank to offer Bitcoin funds to its wealth management clients. Through partnerships with firms such as Galaxy Digital and NYDIG, the bank provides exposure to Bitcoin investment products. It continues to research digital asset infrastructure and is assessing opportunities in decentralized finance (DeFi).

Citigroup (Citi)

Citigroup has been building a digital assets division focused on developing blockchain-based solutions for trade finance, securities services, and cross-border payments. The bank has also tested tokenized deposits and recently received regulatory approval to provide digital asset custody and settlement services to institutional clients.

Bank of New York Mellon (BNY Mellon)

BNY Mellon, the world’s largest custodian bank, has launched a digital asset custody platform, allowing clients to hold and transfer cryptocurrencies like Bitcoin and Ether alongside traditional investments. The bank’s move reflects its belief that digital assets are becoming an essential part of modern investment portfolios.

Standard Chartered

Standard Chartered has been particularly active in the crypto ecosystem. Through its subsidiary Zodia Custody, the bank provides institutional-grade crypto custody services in partnership with Northern Trust. It also operates Zodia Markets, a digital asset trading platform offering spot and over the counter (OTC) services for institutional clients.

HSBC

Although traditionally cautious about crypto, HSBC has entered the digital asset space through tokenization and blockchain pilots. It has launched projects involving tokenized gold and is exploring central bank digital currency (CBDC) integration for international payments.

Executives in the industry emphasize that blockchain-based infrastructure is now mature enough to support mainstream adoption. They note that clients should have seamless access to both digital and traditional assets within a single financial platform, a shift that signals the growing convergence of conventional finance and the crypto economy.

Overall, these developments illustrate how traditional banks are no longer treating crypto as a fringe asset but as an emerging component of global finance.

By offering custody, trading, and tokenization services, these institutions aim to bridge the gap between traditional finance (TradFi) and the rapidly expanding digital asset economy, a trend expected to accelerate as regulations evolve and institutional demand grows.