Bitcoin News Today: JPMorgan Enters Crypto Lending as Market Surges to $39B (+306% since 2022) Backed by GENIUS Act

JPMorgan Chase is preparing to enter the crypto lending market by offering loans collateralized by Bitcoin and Ethereum, a move signaling a pivotal shift in the bank's approach to digital assets. The initiative, which is pending regulatory approval, could launch as early as 2026 and would position the bank among the first major U.S. financial institutions to directly leverage onchain assets as collateral. This development follows a surge in demand for crypto-backed loans, with total outstanding borrowings now exceeding $39 billion globally, including stablecoin-backed loans. The market has rebounded sharply from a low of $9.6 billion in late 2022, reflecting renewed institutional and retail interest after previous collapses in the sector.

The bank’s strategy aligns with the recent enactment of the GENIUS Act, a regulatory framework that clarifies oversight for stablecoins and tokenized assets. The law establishes reserve requirements for stablecoin issuers, places oversight under the U.S. Federal Reserve, and enhances compliance standards for digital financial products. This regulatory clarity is critical for enabling banks to develop crypto-linked offerings within established legal boundaries. JPMorgan’s entry into the space also builds on its prior launch of loans collateralized by spot Bitcoin ETFs, such as BlackRock’s Bitcoin Trust, but marks the first direct use of onchain assets like BTC and ETH.

JPMorgan’s approach to crypto lending involves relying on regulated third-party custodians—such as Coinbase Prime or Anchorage Digital—for secure storage of client assets, rather than self-custody. The bank faces operational challenges, including managing the volatility of crypto collateral through real-time margining protocols and addressing legal uncertainties around liquidation and enforceability under U.S. bankruptcy law. Despite these hurdles, the bank’s expertise in structured finance and risk management positions it to navigate the complexities of the crypto market, particularly as infrastructure for institutional crypto finance matures.

The initiative underscores a broader evolution in JPMorgan’s stance toward digital assets. Once critical of crypto, with CEO Jamie Dimon famously calling Bitcoin a “fraud” in 2017, the bank has since embraced regulated digital asset infrastructure. This includes investments in blockchain-based payment systems like Onyx and support for tokenized deposit rails. The crypto-collateralized loan program represents the next step in JPMorgan’s strategy to integrate digital assets into traditional financial systems while avoiding speculative exposure. The service also addresses a key demand from institutional clients seeking liquidity without selling their crypto holdings.

Competitors in the U.S. banking sector are also adapting to the crypto landscape. Bank of America is exploring tokenized deposit products and stablecoin-linked remittance systems, while Morgan Stanley is evaluating crypto trading integrations through its E*Trade division. Citibank has invested in blockchain custody and digital asset compliance solutions. These moves reflect a growing recognition that crypto is reshaping financial services, compelling legacy institutions to innovate or risk obsolescence. JPMorgan’s foray into crypto lending not only expands its digital asset offerings but also reinforces its role in bridging traditional finance and the evolving crypto ecosystem.