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The biggest bank in the U.S., JPMorgan Chase, is now reportedly dealing with U.S. crypto exchanges Coinbase and Gemini as customers.
On May 12, the Wall Street Journal (WSJ) reported that this is the first time the bank has served clients from the cryptocurrency industry. It was reported that both exchange accounts were accepted last month and the bank has started processing transactions.
It is noteworthy that the bank is not processing Bitcoin or other crypto transactions on behalf of the exchanges, but it is offering cash-management services and handling dollar transactions for their clients based in the United States.
The report says the bank will process all wire transfers, dollar deposits and withdrawals through the Automated Clearing House network.
WSJ’s sources claim that both exchanges have been asked to go through a stringent screening process, mentioning leading banks’ long-standing unwillingness to relate with businesses related to cryptocurrency.
Last month, Gemini received a new security qualification, a Service Organization Control (SOC) 1 Type 1 certification, after it passed a review by Deloitte. Likewise, Coinbase Custody sealed both an SOC 1 Type 2 and a SOC 2 Type 2 evaluation by Grant Thornton.
Both exchanges meet regulatory requirements as Coinbase is registered as a money services business with the Financial Crimes Enforcement Network while Gemini received a trust charter from New York’s Department of Financial Services. They have likewise met the requirements for operation under NYDFS’ exacting BitLicense framework and are licensed money transmitters in multiple states.
Jamie Dimon of JPMorgan has been criticizing the cryptocurrency space in recent years, saying Bitcoin is “worse than tulip bulbs,” and he predicted that speculation on the leading cryptocurrency won’t end well.
JPMorgan Chase has been positive regarding the potential of blockchain and announced in February last year that it is planning to issue its own settlement-focused digital currency known as JPM Coin.