Ethereum: JPMorgan Accepts Bitcoin and Ethereum as Loan Collateral

JPMorgan has opened up Bitcoin and Ethereum collateralized loans to institutional clients through its digital asset platform Kinexys. Clients can exchange these assets for USD financing, with collateral held by third-party institutions such as Fidelity Digital Assets and Coinbase Custody.

Loans Completed via Kinexys

This arrangement began in March 2026, primarily targeting hedge funds and corporate treasury departments. The bank does not directly hold the tokens pledged by clients but issues loans based on custody receipts and records the collateral relationships in Kinexys' permissioned blockchain system.

According to reports, the valuation of the collateral will be continuously updated with real-time prices provided by oracles like Chainlink. If the asset value falls below a preset level, the system will trigger a margin call; if clients fail to meet the additional requirements, the custodian may liquidate the related crypto assets to cover the shortfall.

Collateral Discount Rate Ranges from 30% to 50%

JPMorgan has set a discount rate of 30% to 50% for crypto asset collateral. This means that if a client pledges $100,000 worth of Bitcoin, the actual loan amount they can obtain is approximately $50,000 to $70,000.

• Collateral discount rate is approximately 30% to 50%
• $100,000 in Bitcoin can correspond to about $50,000 to $70,000 in loans
• Related services will launch in March 2026

This level is significantly higher than traditional collateral such as U.S. Treasuries, investment-grade corporate bonds, and gold, reflecting that the bank still views crypto assets as a highly volatile asset class. However, compared to earlier discussions within some major banks about higher discount rates, the current range indicates an increased risk tolerance.

Wall Street Continues to Expand Crypto Access

The report also mentioned that JPMorgan had previously submitted documents for structured notes linked to BlackRock's spot Bitcoin ETF—IBIT. Meanwhile, Goldman Sachs, Citigroup, and Bank of America are also advancing tokenized deposit networks, set to launch in the first half of 2027.

This means that large banks' participation in digital assets is extending from trading and custody to collateralized financing and settlement networks. For the market, JPMorgan's inclusion of Bitcoin and Ethereum as loan collateral signifies that crypto assets are being more broadly integrated into the traditional financial credit system.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.