The arrangement, made popular over the past few years in the Bitcoin industry by newer companies, enables a bitcoin holder to obtain fiat money like U.S.
The Wall Street giant lent cash collateralized by bitcoin owned by the borrower for the first time, a spokeswoman for the bank told Bloomberg.
Bitcoin investors have commonly leveraged the setup to increase their holdings when the price of the digital currency dips.
With a bitcoin-backed loan, a bitcoin holder can pay for goods or services with cash – for example, to buy a house or pay medical bills – without needing to sell their bitcoin.
Historically, miners would sell part of their produced bitcoin to cover expenses, but over the past couple of years big players in the industry have grown fond of taking out cash loans with their bitcoin holdings.