JP Morgan Embraces Crypto Without Custody
JP Morgan Chase announced a significant change in its approach to cryptocurrencies by enabling clients to buy digital assets through the bank. However, the institution will not hold or custody these cryptocurrencies itself. CEO Jamie Dimon revealed this move during the bank’s annual investor day on May 20, 2025.
“We are going to allow you to buy it,” Dimon said. “We’re not going to custody it. We’re going to put it in statements for clients,” according to CNBC. This decision marks a notable shift for the banking giant, especially since Dimon has been openly skeptical about cryptocurrencies in the past.
Jamie Dimon’s Changing View on Bitcoin
Dimon’s announcement contrasts sharply with his previous remarks, in which he famously called Bitcoin “a hyped up fraud, a pet rock” in 2023. Despite his personal reservations, Dimon acknowledged the growing client interest in cryptocurrencies.
“I don’t think you should smoke, but I defend your right to smoke. I defend your right to buy bitcoin,” he said. This metaphor highlighted his willingness to support client choice even when he remains personally doubtful about the asset.
Rising Trend Among Financial Institutions
JP Morgan is following a trend where major financial institutions expand into cryptocurrency offerings. Goldman Sachs has already ventured into crypto services, while Morgan Stanley recently announced plans to enter the market. E-TRADE, a Morgan Stanley subsidiary, is also exploring crypto options.
In the brokerage sector, Schwab backs the institutional crypto trading venue EDX Markets and plans to offer cryptocurrencies to investors, pending regulatory approval. Robinhood continues to generate substantial profits from cryptocurrency trading, reflecting sustained consumer demand.
Custody Services Remain a Challenge
JP Morgan’s choice to enable crypto purchases without providing custody services raises important questions about who will safeguard the digital assets. Traditionally, U.S. banks have faced regulatory hurdles in offering crypto custody, particularly due to SAB 121 restrictions.
While JP Morgan is a leader in blockchain development, its decision to avoid custody contrasts with other banks like BNY Mellon and Standard Chartered, which view custody as a growth opportunity.
Potential Custody Partners for JP Morgan
To provide custody services indirectly, JP Morgan will likely partner with an external custodian. Possible candidates include established crypto startups such as Coinbase, Anchorage Digital, Paxos, BitGo, or Ripple Custody.
Institutional startups like Zodia Custody and Komainu could also be contenders, although they currently lack a strong presence in the U.S. market. Alternatively, JP Morgan might choose major banks like BNY Mellon, which have significant security budgets but remain competitors.
Security Risks and Industry Dynamics
The risk of crypto custody was highlighted by recent security breaches at Coinbase, where data theft by customer support employees led to social engineering attacks against customers. This incident underscores the challenges custodians face in protecting digital assets.
While crypto startups bring specialized expertise in blockchain security, traditional financial institutions often have more extensive resources and security infrastructure. However, competitive factors and market positioning add complexity to JP Morgan’s potential partnerships in this area.
JP Morgan’s new approach allows it to meet client demand for cryptocurrencies while sidestepping the complexities and risks of custody. This move reflects a cautious but significant step into the evolving digital asset space by one of the world’s largest banks.
