[Financial Times reported this week](https://www.ft.com/content/70279a78-6e48-49ec-a0c3-b091e9d87bc10 that JPMorgan is about to reverse its long-standing opposition to cryptocurrency, by starting to lend against clients’ crypto holdings. According to FT, “the policy would mark a big shift for JPMorgan’s chief executive Jamie Dimon, who eight years ago branded bitcoin a ‘fraud’ that would ‘eventually blow up’ and was only useful for drug dealers and murderers.”
But what a difference a day makes. “JPMorgan could start lending directly against crypto assets such as bitcoin and ethereum next year, according to people familiar with the matter, who cautioned that the plans were subject to change.” Not all of the big players are on board … yet. “Rivals such as Goldman Sachs do not accept crypto as collateral.… More banks have embraced crypto as the mood changes in Washington, with the second Trump administration favoring lighter regulation compared with the Biden administration. Morgan Stanley has been weighing a move to offer crypto trading through the ETrade platform.”
{The Economist of London reported on July 16 on how “Stablecoins might cut America’s debt payments. But at what cost?” They noted that U.S. interest payments on the federal debt will top $1 trillion next year, and that one of the options under review by Trump’s economic advisers, including Treasury Secretary Scott Bessent, is to unleash Treasury-backed stablecoins as a way to lower interest rates. “Could stablecoins—cryptocurrency tokens backed by safe assets such as short-term Treasury bonds—drive up demand for American debt, and pull down borrowing costs?” they ask suggestively. In other words, if there is massive buying of short-term Treasuries by the stablecoin impresarios, the increased demand will drive down interest rates.
