JPMorgan Chase Starts Accepting Bitcoin Businesses for Banking Services
May 12, 2020
JPMorgan Chase has reportedly started providing banking services to bitcoin businesses, with the first two clients being Coinbase and Gemini exchanges. JPMorgan also recently recommended having cryptocurrency in investment portfolios as its CEO, Jamie Dimon, changed his mind about bitcoin.
JPMorgan Chase’s Bitcoin Clients
JPMorgan Chase & Co. has reportedly started to accept clients from the cryptocurrency industry. The Wall Street Journal reported on Tuesday that two prominent bitcoin exchanges, Coinbase Inc. and Gemini Trust Co., have become banking customers of JPMorgan Chase, citing people familiar with the matter.
The two bitcoin exchanges’ accounts were approved in April and transactions are just starting to be processed, the publication added. JPMorgan Chase is mainly providing cash-management services to the exchanges. It is handling dollar-based transactions for their U.S.-based customers, including processing deposits and withdrawals, through the Automated Clearing House network, and wire transfers.
Many customers of Coinbase and Gemini link their bank accounts to their cryptocurrency accounts so a payments processor is required for handling cash transfers to and from those bank accounts. The services JPMorgan offers do not include handling bitcoin or crypto transactions for the exchanges.
JPMorgan Warming up to Bitcoin
Large financial institutions are often reluctant to provide banking services to cryptocurrency businesses. Coinbase and Gemini had to go through a long vetting process to get JPMorgan Chase’s approval, which likely took into account the fact that both are regulated bitcoin exchanges in the U.S. Gemini holds a trust charter from the New York State Department of Financial Services (DFS) while Coinbase is registered as a money services business with Financial Crimes Enforcement Network (FinCEN) and also holds a Bitlicense from the DFS. Both are licensed as money transmitters in multiple U.S. states.
JPMorgan Chase CEO Jamie Dimon used to call bitcoin “a fraud,” predicting in September 2017 that the cryptocurrency would eventually blow up. “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed,” Dimon was quoted by CNBC as saying. However, less than five months later, he told the news outlet: “I regret making” those bitcoin remarks.
Furthermore, JPMorgan has launched its own digital currency called the JPM Coin, which is “a digital coin designed to make instantaneous payments using blockchain technology,” its website details. The JPMorgan research team also recently advised in a report that cryptocurrency should be in a portfolio.
What do you think about JPMorgan accepting bitcoin businesses as clients? Let us know in the comments section below.