Typically, the cryptocurrency industry has been viewed as an inferior sector compared to mainstream stalwarts. This feeling has caused a great deal of lag in the virtual asset environment, with banking institutions going through hard, at least until now.
Just recently, JP Morgan revealed that it was jumping into the digital asset stranglehold by offering banking services to crypto-bigwigs Coinbase and Gemini. According to official sources, the shift in sentiments of JP Morgan comes after the untapped potential of the decentralized market has been realized.
JP Morgan claimed that they will provide services such as deposits, withdrawals and transfers to both Coinbase and Gemini. Both facilities will be focused on the architecture of the Automated Clearing House [ACH], which is approved by most banking institutions. The latest move by the bank is set to prove beneficial to cryptocurrency companies as it solves one of the biggest concerns of the industry: lack of trust.
Banks have generally deferred from partnering with organizations in the virtual asset world due to rampant fears of money laundering. This has slowly dissipated with the passage of time as legitimate companies have gone through a number of regulatory hoops. JPMorgan was also interested in the sector earlier, with the bank pulling out of the planned stablecoin in 2019.
The latest venture of the bank allowed Gemini and Coinbase to become their first cryptocurrency clients. Sources close to JP Morgan added that the two exchange accounts were approved last month, with transactions already being processed. Speaking of the topic at the online portal, a major banker said:
“It’s quite significant news in my opinion. There is little business in fees associated with processing wire and ACH payments, I would expect that there are other associated benefits to JPM from any associated banking services, additional collaboration with both of those firms, potential for winning any future IPO or another angle such as JPM coin being offered on either of those platforms.”
Major bank on-board cryptocurrency companies can also act as a sign for other institutions to sit down and take note. Analysts said that if JPMorgan succeeds with Coinbase and Gemini, then it was only a matter of time before another suit followed. Some people in space found it ironic that a corporation whose CEO named Bitcoin ‘a scam’ earlier was going to make such a move.
JP Morgan CEO Jamie Dimon had previously claimed that fiat currency was the way to go, and that bitcoin was only a way for scammers to make money. Dimon stuck with his statements even though the bank was playing with the idea of a ‘JPM Coin.’ The CEO claimed that while Bitcoin was useless, its underlying blockchain technology had a huge potential.
Say what you’re going to do about growth, the cryptocurrency world will benefit greatly from the news circulation. The objective has always been to achieve credibility among the institutions, and the two exchanges would be happy to know that they were in the initial stages.