JPMorgan Prepares Crypto-Backed Lending as GENIUS Act Takes Effect

The recently passed GENIUS Act is already making waves in the financial sector, with JPMorgan reportedly moving to allow cryptocurrencies like Bitcoin, Ethereum, and even spot BTC ETFs to be used as collateral for loans. This development comes as a direct response to the regulatory clarity provided by the GENIUS Act, which sets a comprehensive framework for digital assets, including stablecoins and crypto custody. The act paves the way for traditional financial institutions to integrate crypto into their services more confidently and securely, without fear of regulatory pushback.

JPMorgan’s potential crypto-backed lending service marks a significant shift for the bank, whose CEO Jamie Dimon has historically been skeptical of digital assets. Now, the firm is signaling a more progressive stance, likely spurred by growing institutional demand and a more supportive legal environment. Reports suggest that JPMorgan could begin offering these services as early as next year, using third-party custodians to securely hold the crypto collateral and applying strict risk management policies such as conservative collateral valuation and volatility buffers.

The move has broad implications. For investors, it unlocks new liquidity options without the need to sell their crypto holdings. For the crypto industry, it signals a deeper integration into the traditional financial system and greater legitimacy. And for banks, it opens up a new line of business that can be both profitable and competitive. Other major institutions, including PNC Bank, are also reportedly exploring similar services in partnership with crypto firms like Coinbase, suggesting a growing trend across the financial industry. The GENIUS Act may have only just passed, but its immediate impact is clear: crypto is no longer on the fringes of finance—it’s moving to the center.