JPMorgan Chase & Co., the largest U.S. bank by assets, has signed the crypto exchanges Coinbase Inc. and Gemini Trust Co. as its banking customers, according to The Wall Street Journal.
JPMorgan already approved the two crypto exchanges’ accounts and is already processing transactions. Both exchanges are regulated in the U.S., but Gemini and Coinbase aren’t the first crypto clients for JPMorgan. TokenSoft, which is a regulated transfer agent and software vendor for security token services, has had an account at JP Morgan since 2017.
Also, in February 2019 JPMorgan became the first U.S. bank to create and successfully test a digital coin representing a fiat currency. The JPM Coin is based on blockchain technology and enables instant transfers of payments between institutional clients. It is a digital coin representing United States Dollars and always has a value equivalent to one U.S. Dollar.
In 2017, JPMorgan chief executive Jamie Dimon called bitcoin a “fraud”, but currently JPMorgan’s view on Bitcoin appears to be rapidly softening.
“We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators. Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer,” said Umar Farooq, head of Digital Treasury Services and Blockchain of JP Morgan.
With crypto exchanges now accepted by an important bank as JPMorgan, it’s possible that other institutions may follow the same path. The traditional finance industry could become more open to the disruptive innovative financial technology.