According to a recent article published by the Wall Street Journal, JPMorgan is now allegedly onboarding certain crypto-exchanges for banking services.
Crypto & Banks
For the past few years, crypto-related businesses struggled with finding banks that would open up accounts for them or provide them with cash management services. In certain jurisdictions, even those that did required sky-high fees for the service.
The main reason behind this blockade is that cryptocurrencies mainly navigated a grey legal area because of their novelty. However, we are seeing a broad and fast acceptance from traditional finance due to a consistent increase in regulatory clarity as well as an overwhelming number of businesses and services in the crypto-businesses with a growing user-base.
JPMorgan & Crypto-Exchanges
According to the report, Coinbase and Gemini both got their approvals for cash-management services from JPMorgan in April 2020. The former is the largest cryptocurrency exchange in the United States, while Gemini is relatively newer and smaller. Both exchanges however have shown regulatory compliance efforts; which may be the main reason for JPMorgan’s consideration.
It is worth noting that the services offered by the bank are non-Bitcoin related and they will only handle the cash-section of the business. Albeit, it is a very integral part as clients and customers need a fiat-onramp to both invest and spend. With that being said, it is a large step being taken towards global accessibility when a bank as large as JPMorgan onboards a Bitcoin-related business.
Prominent investors and traders that did not previously show any interest in Bitcoin, became outspokenly bullish once reputable firms such as Tudor Investment BVI and Renaissance Technologies, began publicly exploring Bitcoin.
The main motivator is incoming inflation due to the excessive printing of money by central banks. Bitcoin has been subject to the “safe-haven” narrative, which is being embraced by many. Additionally, due to its digital presence and easy accessibility, it is being considered a clear bet for some.