JP Morgan Considering Loans Secured by Bitcoin: "US JP Morgan Promoting"

Digital Assets on the Verge of Mainstream Integration

JPMorgan Chase, the largest bank in the United States, is reviewing a loan product secured by virtual assets.

On the 21st (local time), the UK’s Financial Times (FT) reported that JPMorgan Chase's review signals that the largest US bank is actively joining the movement to accept digital assets into the mainstream financial system.

Citing sources, FT noted that JPMorgan could start making direct loans with virtual assets such as Bitcoin and Ethereum as collateral as early as next year. However, these plans may change in the future, according to these sources. Previously, it was known that JPMorgan first plans to launch a scheme providing loans secured by holdings of physical virtual asset Exchange Traded Funds (ETFs).

FT pointed out that, for Bitcoin-backed loans to become a reality, technical hurdles must be addressed regarding how to handle seized Bitcoin if a borrower defaults. Currently, most US banks, including JPMorgan, do not reflect virtual assets on their balance sheets, so it is anticipated they will adopt a model in which customer virtual assets are held by third-party custodians such as Coinbase.

Eight years ago, JPMorgan CEO Jamie Dimon criticized Bitcoin as a "fraud" and harshly commented that "Bitcoin is only useful for drug dealers or murderers." Considering Dimon's previous remarks, FT analyzed that the current policy shift at JPMorgan is a dramatic turnaround.

At an earnings conference call on the 15th, Dimon stated, "We are involved with both JPMorgan Deposit Coin (JPMD) and stablecoins, and are working to understand and properly manage them." He continued, "I’m not exactly sure, but I think they actually exist," while adding, "But I still don’t understand why people want stablecoins instead of simple payment methods."

Recently, the United States House of Representatives passed its first piece of virtual asset regulation—the 'Stablecoin Act'—along with the 'GENIUS Act.' This law incorporates stablecoins into regulatory frameworks, and clearly defines standards and responsibilities for issuing and managing virtual assets.

Jang Ji-min, Hankyung.com Guest Reporter newsinfo@hankyung.com