TLDR
JPMorgan launched a program in March 2026 letting institutional clients pledge Bitcoin and Ethereum for U.S. dollar loans through its Kinexys platform.
Crypto collateral carries haircuts of 30% to 50%, far higher than the 1% to 5% applied to Treasuries.
Custodians Fidelity Digital Assets and Coinbase Custody hold the pledged tokens while Chainlink supplies real-time pricing data.
Goldman Sachs, Citigroup and Bank of America are building a separate tokenized deposit network set to launch in 2027.
CEO Jamie Dimon once called Bitcoin a fraud, but the bank now treats it similarly to stocks, bonds and gold on its books.
JPMorgan Chase now lets large institutional clients use Bitcoin and Ethereum as collateral for U.S. dollar loans. The bank opened the program in March 2026 through its digital assets platform called Kinexys.
This marks a shift for a bank whose leadership spent years dismissing crypto. CEO Jamie Dimon once described Bitcoin as a “hyped-up fraud” and compared it to a pet rock.
The Kinexys platform, formerly named Onyx, already processes over $5 billion in daily transaction volume. Adding crypto collateral extends a system the bank had already built to move tokenized value.
How the Program Works
Clients deposit Bitcoin or Ethereum with a third-party custodian, usually Fidelity Digital Assets or Coinbase Custody. JPMorgan never holds the tokens directly.
Instead, the bank receives a receipt confirming the deposit. The client then gets a dollar loan backed by that crypto holding.
Price feeds from Chainlink update the collateral value continuously. If prices fall below a set threshold, the system triggers an automatic margin call.
The client must add more collateral or repay part of the loan. If they do neither, the custodian can sell the crypto to cover the gap.
Comparing the Collateral Discounts
Banks apply “haircuts” to collateral based on how risky an asset is. U.S. Treasuries typically get haircuts of just 1% to 5%.
Investment-grade bonds sit between 5% and 15%. Gold usually falls between 10% and 25%, depending on the custodian.
JPMorgan applies haircuts of 30% to 50% on Bitcoin. That means a client pledging $100,000 in Bitcoin might receive between $50,000 and $70,000 in loan proceeds.
Ethereum reportedly gets wider haircuts than Bitcoin inside the bank’s models. JPMorgan’s own analysts have said Bitcoin has moved further into the institutional mainstream than Ethereum has this year.
The program also connects to JPMorgan’s other crypto products. The bank has filed for bitcoin-backed structured notes tied to BlackRock’s spot Bitcoin fund, offering leveraged returns tied to price targets through December 2026.
Other banks are watching closely. Goldman Sachs has been developing its own crypto-collateral approach through repo structures, while Citigroup is building custody systems meant to handle trillions in tokenized assets.
Separately, Bank of America, Citigroup and Wells Fargo are working together on a tokenized deposit network. That system is expected to launch in the first half of 2027 and would let companies move funds around the clock.
Regional banks are unlikely to build this kind of infrastructure on their own. Most will likely rely on the same custodians and pricing providers that JPMorgan already uses.
The program currently applies only to institutional and high-net-worth clients. Retail access is not yet part of the offering, though reports suggest JPMorgan is reviewing a broader rollout for qualified retail investors by mid-2027.
Regulators have not issued formal guidance on banks holding crypto as collateral. The direction of that guidance over the coming months will likely shape how fast other banks follow JPMorgan’s lead.
