Its CEO once called bitcoin a fraud but now U.S. banking giant JPMorgan Chase has added its first cryptocurrency exchange customers. The bank has signed on Coinbase and Gemini as its cryptocurrency exchanges. One of the factors of approval is the fact that both exchanges are regulated in the U.S. Accounts for the two crypto firms were approved last month are now in use.
The decision made by JPMorgan is a notable one especially in a nation where banking services is proven to be a challenge for any firms dealing with cryptocurrencies, which are viewed as a high risk by the banking industry. Up until now, exchanges and other firms working with digital assets have been served by a few crypto-friendly banking institutions such as Silvergate.
This wouldn’t be JPMorgan’s first engagement with a crypt client. TokenSoft, a regulated transfer agent and software vendor for security token services, has had an account at the bank since 2017.
U.S. banking regulator Brian Brooks said, “Banks not only have the ability, they have an obligation to serve all lawful businesses. They shouldn’t be discriminating because something’s a new technology. As crypto matures, there are increasingly many companies that have perfectly robust risk management systems and do have an ability to comply with those laws, and they shouldn’t have trouble finding bank relationships.” Brian Brooks was Coinbase’s former chief legal officer and currently holds the senior deputy title at the Office of the Comptroller of the Currency.
JPMorgan is now providing U.S users of Coinbase and Gemini’s with deposits and withdrawals via wire transfer and automated Clearing House (ACH) transactions. It’s also helping the exchanges with cash management services. JPMorgan has also built its own blockchain settlement service with its own U.S.dollar-backed token, dubbed JPM Coin.