I have Unity version 6000.0.30f1, and I've started a new 2D project with the option Universal 2D - Unity’s Universal Render Pipeline pre-configured with 2D Renderer.
I'm adding jpg image to assets. This image is displayed correctly when used as sprite directly. When used in material with Universal Render Pipepline/2D/Sprite-Lit-Default as a shader (default option) it shows properly in New Material tab. When trying to use it as a material on a simple sprite like a Square, sprite remains white.
What could be wrong?
I tried different settings, shaders like Unlit, checked tiling, offsets, texture type, lighting source etc. Checked project's settings regarding URP.
I tried to use simple material with "Unlit/Color" and this one works fine on this sprite. Lighting is working, Light 2D color influences a sprite from jpg and Square sprite.
The same approach worked with same image for older project for Unity 2020 with URP manually configured.
When I use 3D object like Cube, applying the same material on it works ok in the same project.
TLDR answer: For 2D project, using graphics as a material textures won't work automatically for Sprites (Sprite Renderer). Some solutions are proposed below. Another approach is to use 3D objects with a Mesh Renderer on which such texture works automatically (so basically switch to 2.5D project).