JP Morgan is the third largest bank in America and one of the largest banks in the world. Yesterday, the Wall Street Journal published an article stating that JP Morgan will now offer banking services for the US-based crypto exchanges Coinbase and Gemini.
This would be the first time that JP Morgan has offered services to customers directly related to Bitcoin and other crypto currencies. The accounts of the two crypto exchanges were established in April and are now operational.
Coinbase and Gemini are committed to meeting regulatory requirements, which, according to the Wall Street Journal, is a key reason JP Morgan approved the accounts.
JP Morgan will facilitate the FIAT management of the crypto exchanges. Gemini and Coinbase customers will be able to make deposits and withdrawals via wire transfer. The accounts will be managed automatically via the backend of the crypto exchanges.
Bitcoin and many other crypto currencies are decentralized per se, but at least for the time being still dependent on centralized financial structures. Deposits and withdrawals to and from the exchanges are handled by banks. Platforms on which cash can be exchanged directly into crypto currencies, such as local bitcoins, for example, are extremely inefficient and are prohibited in many countries.
JP Morgan has been critical about Bitcoin so far
So far, the bank has not been very friendly towards Bitcoin and other crypto currencies. In September, Jamie Dimon, CEO of the company, called Bitcoin a fraud. Again and again, the investment advisors of the bank warn and recommend not to invest in crypto-currencies.
Whether Dimon has changed his mind is unclear. Anyway, in February 2019 the bank announced that it was working on its own blockchain project. JPM-Coin is to become a stablecoin based on the US dollar. Since its announcement, there have been very few reports about the progress or the current status.
In any case, the big bank’s push is a good sign for the mass adoption of crypto-currencies and probably the biggest news after the halving. If a bank of this calibre takes this step, one can assume that other banks will follow. Given the low interest rates and the unprecedented global money printing machine, banks may also look for alternatives. Bitcoin and crypto-currencies are increasingly gaining worldwide interest and banks do not want to miss the boat entirely.