J.P. Morgan Chase, a $2.7 trillion banking behemoth, will offer banking services to Gemini and Coinbase, two of US-based cryptocurrency exchanges, according to reports by the WSJ. Specifically, the Jamie Dimon-led bank will offer deposit, withdrawal, and transferring services for customers with Automated Clearing House (ACH) infrastructure but will notably not deal with digital currencies.
J.P. Chase To Offer Banking Services To Coinbase & Gemini
The bank approved both exchanges in April as the financial institution extends their crypto clients. Other than these two regulated exchanges, JP Morgan continues to offer services to TokenSoft.
The move marks a complete reversal and re-consideration since the bank’s top brass had earlier shown their disdain for cryptocurrencies and specifically Bitcoin on different occasions reiterating that digital currencies were agents of money laundering and facilitators of various illegalities.
However, the tone is quickly shifting. The approval of the two ramps is a sign that despite the opposition from regulators and doubts on crypto, they were not after all “fraud”.
Across the world, digital currencies are treated with skepticism thanks to their pseudonymous nature. Bitcoin, for instance, remains censorship-resistant and global. In times of financial turbulence, the coin can be used as a safe haven.
The decision by JP Morgan could thaw the already frosty relationships between banks in different countries and cryptocurrency exchanges.
Still, for the relationship to be open, Bitcoin and digital currencies must first of all be regulated, and that means the formulation of laws that will enable the tightly controlled traditional banking systems to support crypto assets underpinned by decentralized technology.
Coinbase Leading The Battle For Mainstreaming Bitcoin
In recent times, Barclays stopped offering services to Coinbase as UK customers were cut off from the country’s Faster Payment Services (FPS). FPS enable instantaneous deposit and withdrawal of GBP. A source told Financial Magnates that Barclays was not overly “comfortable” with crypto.
“It is my understanding that Barclays’ risk appetite has contracted a little—I’m not sure exactly why or what’s been driving that, maybe there has been some activity they are not happy with. But it’s about Barclays’ comfort level with crypto.”
Coinbase however struck a deal with ClearBank to serve their UK customers. Meanwhile, Gemini continues to add more cryptocurrencies. The latest addition was BAT.