JPMorgan started to provide services for the Coinbase and Gemini exchanges. Where did this decision come from and what does this event mean for the crypto market?
JPMorgan for Coinbase & Gemini
JPMorgan — one of the largest financial holdings in the world with assets worth 2.5 billion dollars, operating in more than 50 countries and a leader in investment banking and business client services, has adopted the US crypto exchanges Coinbase and Gemini as its clients.
The Wall Street Journal reports that the exchanges were accepted as clients as early as April and transactions are starting now to be processed.
First steps to reconciliation
This is the first time ever that a bank has decided to serve customers in the crypto industry. Banks are afraid of losing power in the financial world, so from the beginning of crypto, they try to do everything to attract people to their side and discourage people from investing in digital currencies.
With the development of the cryptocurrencies, the likelihood increases that the digital currency will replace paper money. Perhaps this cooperation is the first micro-step to reconciliation and consensus.
The role of the bank
JPMorgan Chase does not process Bitcoin (BTC) or other stock exchange transactions, but provides cash management services and handles US dollar transactions for US customers. The Bank is reported to process all transfers as well as payments and withdrawals in dollars through the Automatic Clearing House (ACH).
Why such a decision?
Sources state that both Gemini and Coinbase were carried out through a rigorous verification process, which was quite complicated. This only underlines the reluctance of banks to establish relationships with cryptographic activities.
However, the cooperation of a large and trusted American bank with the stock exchanges is not only due to the benefits that such cooperation offers. The crypto exchanges such as Gemini and Coinbase are fully regulated and safe. In April this year, Gemini obtained a Service Organization Control 1 (SOC 1) security certificate and the Coinbase exchange had both SOC 1 and SOC 2 and received a trust card from the New York City Financial Services Department.
The opinion of the founder of the bank
Jamie Dimon, JPMorgan’s CEO, has criticised the heavy cryptocurrencies, so the bank’s support for the stock exchange may be surprising. Dimon believes that Bitcoin’s speculation will not end well for investors.
Despite all these problems and fervent disputes with the crypto world, the bank is positive about the potential of blockchain and has announced plans to issue its own digital currency — JPM Coin. It will be the first bank in the United States to do so.
All these steps bring us closer to the moment when everyone in the world will use the digital currency and banking institutions and the crypto world will cooperate