According to a Tuesday report by the Financial Times, American banking behemoth JPMorgan is considering allowing its clients to borrow cash against Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies.
Notably, the policy change that is currently being explored would make it possible to directly use crypto as collateral instead of just crypto-related products like exchange-traded funds (ETFs).
JPMorgan, which is the largest US bank by total assets, could potentially gain a competitive advantage with such a trailblazing move. Its key competitors, such as Goldman Sachs, are yet to allow borrowing cash against crypto.
The bank would likely use the services of a third-party custodian for crypto-backed loans, according to the report.
If the policy ends up being implemented, this would make a major U-turn for the banking titan and CEO Jamie Dimon, who has been consistently hostile toward the nascent asset class.
In May, as reported by U.Today, Dimon criticized the idea of the US stockpiling Bitcoin.
Vladislav Sopov
U.Today Editorial Team