Two of the leading cryptocurrency exchanges, Coinbase and Gemini, have reportedly received banking services from the largest bank in the United States, JPMorgan Chase. As we can see from a report shared in the cryptonews by Wall Street Journal on May 12, unnamed sources familiar with the matter highlighted that the move is the first time the banking giant has served clients from the crypto industry.
Both of the exchange accounts were reportedly accepted in April, and the transactions are now starting to be processed, as the sources told WSJ. However, JPMorgan is not processing Bitcoin (BTC) or any other cryptocurrency transactions on behalf of Coinbase and Gemini.
Instead, it is providing cash management services and handling dollar transactions for their US based clients.
The bank will process all wire transfers and dollar deposits and withdrawals through the Automated Clearing House network.
As sources claimed in the Bitcoin news, both Coinbase and Gemini were asked to undergo a rigorous vetting process which points to major banks and their long-standing reluctance to forge relationships with crypto-related businesses.
Now, we can see that both Coinbase and Gemini have established themselves as regulated entities. Gemini is owned by the Winklevoss twins and has previously drawn criticisms from die-hard libertarian crypto advocates for the controversial “crypto needs rules” ad campaign.
Rules like mathematics? Sure. Crypto needs that. Rules like "KYC AML licencing taxation Patriot Act bitlicense bullshit?" No. Crypto doesn't need that. pic.twitter.com/8azzqCKlwa
— Book of Nick (@BookofNick) January 4, 2019
On the other hand, Coinbase is registered as a money services business with the Financial Crimes Enforcement Network. Gemini obtained a trust charter from New York’s Department of Financial Services back in 2015.
Coinbase and Gemini have also satisfied the requirements to operate under the BitLicense framework issued by NYDFS, and are both licensed transmitters in multiple states. Even though JPMorgan’s Jamie Dimon has been a vocal Bitcoin critic in the past, saying that the cryptocurrency is “worse than tulip bulbs” and “won’t end well,” it seems like the tables have turned and the bank is now giving banking services to both exchanges.
Despite the criticism on Bitcoin, the bank (JPMorgan Chase) has been positive about the potential of blockchain. As they said, there are plans to issue their own settlement-focused digital currency, JPM Coin, which would give them a go in the world of cryptocurrencies.
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