Here’s something you don’t see every day. A standard financial institution is backing crypto. J.P. Morgan – arguably one of America’s biggest banking firms – has announced its support for cryptocurrency exchanges like Coinbase and Gemini in New York.
J.P. Morgan Is A Huge Advocate
This is a major step forward in the right direction, and sure to make cryptocurrency far more mainstream and legitimate. It also represents a huge change for the CEO of the bank Jamie Dimon, who in the past, has often been very unkind to bitcoin and its altcoin cousins. Dimon is on record calling bitcoin a “fraud,” and saying some other very nasty things about the world’s number one digital currency by market cap.
Still, it’s not like J.P. Morgan hasn’t changed its tune in the past. The banking institution announced last year that it was working on plans to release a new digital currency that could be used directly by consumers for payments and that it would be known as JPM Coin. So, maybe this newfound attention towards bitcoin isn’t such an oddity after all.
J.P. Morgan will offer traditional bank accounts to both Coinbase and Gemini. The relationships between the three entities was established on paper in April. The terms of the partnerships see J.P. Morgan providing withdrawal, deposit, and transfer services to both trading platforms through Automated Clearing House (ACH) assistance.
An anonymous banker explains in a new report:
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 [initial public offering] or another angle such as JPM coin being offered on either of those platforms. The largest bank offering crypto exchange services means a lot of credibility for the space.
Maybe Things Will Change
In the past, crypto exchanges and traditional banks have not always gotten along, and some have shown outright disdain for each other. For example, many users of Capital One have provided reports that assorted crypto transactions either occur extremely slowly or don’t go through at all. They attempt to purchase crypto either directly through their bank accounts or through their credit or debit cards, only to have the transfers cancel out unexpectedly at the last minute.
The problems for most banks are the ideas of fraud and volatility. They’ve taken note of the heavy number of thefts and malicious attacks that have taken place within the crypto space. They also see that assets like bitcoin are not prone to saying in one place the way fiat currencies like the U.S. dollar tend to do. Perhaps this push of support from JPM is exactly what the doctor ordered for crypto.