May 14, 2020 – Despite previous statements from its head that Bitcoin is comparable to “tulip buds”, JPMorgan now provides banking services to 2 heavily regulated exchanges – Coinbase and Gemini.
The Wall Street Journal cited unnamed sources that this is the first time JPMorgan Chase has accepted clients in the cryptocurrency industry. Writer Paul Vigna said this is a positive development for Bitcoin and a sign that Wall Street is “becoming more comfortable with the business of cryptocurrencies”.
The accounts were approved in April 2020 and transactions are now being processed. JPMorgan will provide cash-management services and will handle dollar transactions for US clients. The bank will not process crypto transactions on the exchanges’ behalf.
Coinbase is the largest exchange in the US. Both Coinbase and Gemini are regulated by multiple third-parties, which could be a reason why they got approved.
Others may view this as non-news, citing that JPMorgan will only handle the dollar transactions and the bigger “win” is if the bank will handle the crypto transactions as well. However, Vigna noted that the fact that JPMorgan will extend services to crypto businesses is a win in itself because, in the past, US banks block crypto businesses from opening up bank accounts as they are concerned that touching Bitcoin will mean exposing the banks to laundering operations.
This article is published on BitPinas: JPMorgan Provides Banking Services to Coinbase and Gemini