JPMorgan Chase has reversed course. The Wall Street institution now officially allows institutional clients to pledge Bitcoin and Ethereum as collateral to secure U.S. dollar loans.
This loan facility operates through the Kinexys platform - a system formerly known as Onyx. The crypto collateral service has been open since March 2026, targeting institutional clients as well as high-net-worth individuals. Kinexys operates at a large scale, processing over $5 billion in daily transaction volume and has recorded cumulative settlements of over $3 trillion.
Sharp U-Turn on Wall Street
JPMorgan’s business decision marks a clear U-turn. For years, CEO Jamie Dimon positioned himself as a vocal critic of digital assets. In 2017, he loudly called Bitcoin a fraud and threatened to fire employees caught trading the digital coin.
Eric Trump highlighted the irony of this move. He noted that the bank, which once heavily criticized Bitcoin, has turned around to offer crypto-based products within an 18-month span.
Custody and Pricing Scheme
JPMorgan enforces strict custody restrictions. The crypto assets pledged by clients never enter the bank’s vaults, but instead remain in cold storage managed by third-party custodians such as Fidelity Digital Assets and Coinbase Custody. In these loan transactions, the bank purely receives only custodial receipts.
Debt risk is managed through collateral discounts, or haircuts. JPMorgan sets the haircut in the range of 35% to 50% for both Bitcoin and Ethereum collateral. This valuation discount is down sharply from a 70% projection several years ago. The easing of collateral requirements reflects subsiding crypto volatility and an increasingly mature custody infrastructure.
To ensure the security of the collateral value, the prices of Bitcoin and Ethereum are updated in real time using Chainlink oracles. If the collateral falls below the lower threshold, the system immediately issues an automated margin call to protect the bank’s loan.
Forcing Competitors to Respond
As a standard-setter in Wall Street banking, JPMorgan’s maneuver had an immediate impact. The decision to accept Bitcoin as loan collateral has directly forced competitor banks to respond to similar demands for crypto acceptance from their clients.
This access to crypto credit may not stop with institutional clients. JPMorgan is reportedly evaluating an expansion path to bring the Kinexys collateral program to qualified retail investors by mid-2027. For digital asset holders, the doors to traditional banking loans are now slowly beginning to open.
As reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
