Wall Street giant JP Morgan Chase is now offering banking services to multiple cryptocurrency exchanges, The Wall Street Journal reported on Tuesday.
As its first, the bank has taken two major crypto clients – Coinbase and Gemini – whose accounts were approved last month and is already processing their transactions.
Citing “people familiar with the matter,” the publication detailed that JP Morgan is primarily offering cash management services to the two crypto exchanges, handling US dollar-based transactions for their US-based customers.
In addition to that, the bank will also process wire transfers, for both deposits and withdrawals, for both exchanges through the Automated Clearing House network.
Can’t ignore Bitcoin anymore
This is a big step for the bank as well as the cryptocurrency sector as a whole, as the bank’s head was very critical about Bitcoin.
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While Jamie Dimon, CEO of the bank, even called Bitcoin “a fraud” and compared it with the infamous Dutch tulip bulb scheme, both Coinbase and Gemini’s businesses are offering trading and other services with Bitcoin and other cryptocurrencies.
Notably, the bank will only process fiat-based transactions for the exchanges, similar to any other business, and will not deal in any digital currencies.
The report also detailed that both the exchanges went through rigorous vetting processes by the bank. Moreover, both Coinbase and Gemini are regulated by multiple parties in the country, which helped them to receive services from the giant.
Meanwhile, other crypto exchanges in the country, and also around the world, are struggling to receive proper banking services.
However, to fill the gap between crypto and banking, banks like Silvergate spawned and have re-modeled its business around such companies.
Last year, the UK entity of Coinbase was dropped by Barclays from its clients’ list, which then lost access to the country’s Faster Payments Scheme (FPS). The exchange, however, quickly restored its services with another banking partner.