JPMorgan will offer crypto trading to institutional clients, while deferring custody, according to senior executives and a recent pilot on the Base network.
What is JPMorgan planning? — institutional crypto trading platform; JPMorgan crypto custody stance
JPMorgan is prioritising an institutional crypto trading platform that gives clients market access and execution tools. Scott Lucas, the bank’s global head of markets and digital assets, told CNBC that trading is in focus while custody is “not on the horizon near‑term.”
In practice, this means JPMorgan will build execution and liquidity services first. Meanwhile, custody responsibilities will be left to specialised firms for now. The approach reduces direct operational exposure while preserving client access to crypto markets.
How will custody be handled if JPMorgan does not provide it?
Clients will likely rely on regulated third‑party custodians and bank crypto custody providers. These partners can offer segregation, insurance and institutional controls. Therefore, trading platforms will need robust connectivity to custodians for settlement and reconciliation.
How does the JPMorgan JPMD deposit token pilot fit and public blockchain network opportunities?
JPMorgan has run a pilot for a deposit token on the Base network. The experiment explores tokenised liabilities and whether on‑chain mechanics can streamline back‑office flows. Importantly, the pilot is exploratory. It lets the bank test public blockchain network opportunities without taking on the liabilities of custody.
Will there be a JPMorgan-Coinbase partnership or other alliances?
JPMorgan’s move does not rule out partnerships. Collaborations with exchanges or infrastructure providers could supply liquidity, custody links and client on‑ramps. That said, specific commercial deals were not announced in the executive remarks, even if Coinbase remains likely to be chosen. Market watchers should expect partner disclosures as products near launch.
Custody alternatives and stablecoin custody options
Because JPMorgan is deferring custody, institutions will weigh several models: regulated custodians, trust companies, and hybrid bank custody providers. In addition, stablecoins may be used for settlement and liquidity. Thus, firms will examine stablecoin custody options alongside fiat rails.
From an operational view, custody integrations are complex. In my work integrating institutional crypto trading platforms, I have seen teams prefer standardised FIX and REST APIs for execution. At the same time, custody connectors are kept modular to separate signing, settlement and reconciliation. Implementations commonly require hardware security modules, segregated client ledgers and formalised runbooks to satisfy auditors and regulators. These demands help explain the sequencing: build trading first, custody later.
Regulatory context and market implications
Regulators are intensifying scrutiny of digital‑asset activities. As the Basel Committee noted, “Crypto‑assets are not legal tender, and are not backed by any government or public authority.” That guidance, and similar national rules, shape how banks approach custody, capital and risk management.
Consequently, JPMorgan’s choice to emphasise trading over custody is a risk‑aware stance. The bank can still innovate with tokenisation and public chains while limiting near‑term compliance burdens. Moreover, this positioning may attract clients who want execution from a trusted bank but prefer independent custodial arrangements.
FAQs
What crypto services is JPMorgan planning?
JPMorgan plans to offer crypto trading services to institutional clients, focusing on execution, liquidity and market connectivity. Custody will remain the domain of specialised providers for the moment.
Why is custody not planned right now?
Scott Lucas described custody as “not on the horizon near‑term,” pointing to regulatory uncertainty and the bank’s desire to phase products. This reduces immediate operational and compliance exposure.
What should clients watch for next?
Watch for announcements on platform capabilities, partner integrations, and custody arrangements. Also monitor regulatory guidance that could affect timing and scope.
In short, JPMorgan’s selective path—prioritising trading, piloting tokenised deposits like JPMD, and deferring custody—balances innovation with caution. This model may influence how other banks sequence crypto offerings as regulation and infrastructure evolve.