Coinbase and Gemini Strike Deal with Banking Giant JP Morgan
Customers of the Coinbase and Gemini exchanges will be able to open a bank account with JP Morgan
The biggest financial firm in America is now taking a step towards integrating cryptocurrencies. In a report by the WSJ, JP Morgan will now offer bank accounts to Coinbase and Gemini, both prominent cryptocurrency exchanges.
The banking relationship, which was established last month, maintains that JP Morgan is going to provide deposit, withdrawal, and transfer services for Coinbase and Gemini customers with Automated Clearing House (ACH) infrastructure.
In the past, cryptocurrency exchanges have found it difficult to establish stable banking relationships due to concerns regarding fraud and money laundering. As a result, these businesses are pushed to turn towards unverified third party payment processes instead.
This is a significant step forward for cryptocurrency companies, not just because the bank has previously had a strong stance against digital currencies, but also because it marks an opportunity to open avenues for improved relationships with legitimate financial institutions. It is a move that suggests traditional financial institutions have become more comfortable with the cryptocurrency market.
It is believed that despite the financial institution’s disapproval of digital currencies, they acknowledge the chance to establish themselves as a leading player in the new and dynamic crypto market.
This follows news of Paul Tudor Jones, a renowned hedge fund investor, revealing that he allocated over two percent of his fund’s portfolio into Bitcoin futures. The presence of notable investors around the community banking in the crypto craze has many banks, JP Morgan included, re-evaluating their approach to the industry.
Despite JP Morgan’s strong stance against cryptocurrencies in the past, it has dabbled in blockchain technology and stablecoins. The bank operates the Interbank Information Network, which allows bank members to exchange information on international payments using the underlying blockchain technology. Some notable banks on the network include Deutsche Bank, Australia, and New Zealand (ANZ) Banking Group, and the Royal Bank of Canada.
The bank also operates the JPM Coin, a digital token similar to a stablecoin. The JPM Coin allows for instantaneous payment transfers between institutional accounts.
JP Morgan is also discussing the possibility of merging Quorum, its blockchain unit, with the Ethereum development studio ConsenSys.