The American multinational investment bank, JPMorgan, has taken two popular cryptocurrency exchanges as banking customers. According to a recent report, the giant bank has approved Coinbase and Gemini in April, and transactions are starting to be processed now.
Cryptocurrency Adoption From JPMorgan
Per a Wall Street Journal report from today, JPMorgan Chase & Co has started accepting clients from the cryptocurrency industry. The bank has approved the largest US-based exchange with over 30 million accounts – Coinbase – and the founded in 2014 by Tyler and Cameron Winklevoss – Gemini.
So far, the bank will primarily provide cash-management services to both exchanges and will handle dollar-based transactions for the US-based customers. It will reportedly process wire transfers, deposits, and withdrawals through an electronic funds-transfer system called Automated Clearing House network.
The report outlines that JPMorgan will not be responsible for any cryptocurrency-based transactions. The two exchanges will handle those themselves. However, since the majority of their customers have linked traditional banking accounts to their accounts on the platforms, they require a payment processor.
This newest collaboration is regarded as the next step from JPMorgan in adopting digital currencies. Years after the bank’s CEO, Jamie Dimon, called Bitcoin a “Fraud” and later apologized for it, JPMorgan becomes the first banking business to extend its services to companies built around Bitcoin and other cryptocurrencies.
Regulation Is Key
The report also informs about the significant steps Coinbase and Gemini had to take before managing to obtain JPMorgan’s approval. What separates those two particular exchanges from others in the space is the degree to which they had become regulated entities. More specifically, the fact that multiple parties regulate both played the most vital role in the approval process.
Coinbase is registered as a money services business with the Financial Crimes Enforcement Network (FinCEN). Additionally, the veteran US exchange has a specialized license for cryptocurrency businesses from the Department of Financial Services (DFS), called the BitLicense.
Gemini, on the other hand, obtained a trust charter from the New York State Department of Financial Services a year after its establishment. Both exchanges are licensed as money transmitters in multiple states.