JPMorgan Chase has announced that it will allow institutional clients to use Bitcoin and Ethereum as collateral for U.S. dollar loans, leveraging third-party custodians to manage risk exposure. This move, reported by Bloomberg, extends the bank's earlier policy of accepting crypto exchange-traded funds as collateral and aims to integrate digital assets into its credit systems by late 2025. Under the new framework, JPMorgan will not directly hold the digital assets. Instead, approved custodians will secure the pledged Bitcoin and Ethereum, allowing the bank to manage credit exposure without direct custody risks. This approach mirrors traditional collateral frameworks but introduces new operational challenges due to the volatility of digital assets. The initiative reflects a broader trend among major U.S. banks to incorporate digital assets into their services, with institutions like BNY Mellon and Morgan Stanley also expanding their crypto offerings.