The step of the major US bank JPMorgan Chase to accept two well-known crypto exchanges as customers with immediate effect could be followed by other institutions. It proves that the traditional financial industry is becoming more open to digital currencies like Bitcoin.
The CEO of JPMorgan Chase once called Bitcoin a fraud, but now the US bank is starting to take on the first companies with activities in the crypto sector. According to the Wall Street Journal, the largest bank in the United States now supports two popular and regulated US crypto stock exchanges with banking services. Namely Coinbase and the Gemini company founded by Tyler and Cameron Winklevoss.
One of the decisive factors in the granting of the licenses was the fact that both exchanges are regulated in the USA. The US users of Coinbase and Gemini can now use deposits and withdrawals via wire transfer and automated bank processing. The company also supports the exchanges with cash management services.
First opening of a major US bank to crypto companies
The step taken by JPMorgan is remarkable, as in America banking services for companies handling crypto-currencies are considered a risk. Stock exchanges and other companies handling digital currencies have generally only been served by smaller, crypto-friendly banking institutions. The larger institutions have so far largely refused to accept crypto-companies.
The step by the major US bank to accept two well-known crypto stock exchanges as customers with immediate effect could now be followed by other institutions. It proves that the traditional financial industry is becoming more open to digital currencies like Bitcoin. Not least because the recent past has also shown that investments in these markets can prove worthwhile.
Blockchain has been a topic at JPMorgan Chase for some time
It was only at the beginning of the year that the US investment bank JPMorgan Chase published a report on block chaining, digital currencies and crypto-currencies. The report states that the technology is years away from widespread use. However, the basis for fast payments and digital currencies is already in place.
Blockchain has been a major focus at JP Morgan for some time. The blockchain initiative introduced by the US bank in 2017 now consists of a network of over 400 banks. The aim of the project is to exchange information on global payment transactions and to accelerate cross-border payments.
A year ago, the bank was also the first US financial institution to test a digital token that represents a FIAT currency (Stablecoin). The JPM-Coin is based on a blockchain-based technology that enables the immediate transfer of payments between institutional customers.
“Crypto-Nation” Switzerland has catching up to do
The connection to the traditional banking system is important for the flow of money between crypto currencies and FIAT currencies. Smooth, fast and secure transfers between the two worlds increase the range and facilitate greater adaptation. Although Switzerland created regulatory requirements and thus legal certainty very early on, access to the banking system for companies in the crypto sector remains cumbersome. Although a number of specialized and smaller banks have now positioned themselves in this new type of business, most large banks have so far completely abandoned this area.
*Originally published in German at CVJ.ch