Keeping the Enemies Close: With JPMorgan in the Service of Kryptonian Companies, a New Frontier is Opening

Von | 5. Juni 2020


Although the head of JPM is tough on crypto-currencies, the bank takes two regulated exchanges as clients in what some call a „game changer.

As the largest of the „Big Four“ banks in the United States, JPMorgan Chase presents itself as an unlikely ally to digital asset service providers trying to break through the glass ceiling that still separates traditional finance from crypto-currency. When news came out on 12 May that the bank has been serving the US-based cryptomoney exchanges Coinbase and Gemini since April, some digital finance experts saw it as a sign that the relationship might finally be thawing.

Although JPM’s CEO Jamie Dimon has always disparaged the suitability of

as a financial instrument, the institution has not neglected Blockchain technology, particularly the development of patented DLT-based tools for international agreements. Now that the main bank in the United States seems to be extending its acceptance also to companies related to crypto-currency, are the traditional players having a qualitative change in the perception of the digital financial space?

The importance of compliance

Coinbase and Gemini are well suited to be at the forefront of integrating the crypto industry with the traditional financial system. Both companies have been particular in securing the most stringent regulatory credentials at both the federal and state levels.

Both are registered with the U.S. Department of Justice’s Financial Crimes Enforcement Network, and their custodial services have earned security ratings according to rigorous certification standards. They have also obtained notoriously scarce licenses from the New York State Department of Financial Services: Gemini has a Trust License, while Coinbase operates under a specialized BitLicense license.

Large American banks discourage their clients from investing in cryptology – a false front or a solid recommendation?
Experts surveyed by Cointelegraph noted that cryptomoney companies willing to go the extra mile to ensure full compliance will be the first to capitalize on the growing interest of major financial institutions in digital assets. Michael Sonnenshein, CEO of digital asset management company Grayscale Investments, told Cointelegraph that JPMorgan’s announcement – along with news of Paul Tudor Jones‘ investment in Bitcoin – shows the promise of greater cooperation between financial firms and compliant digital currency companies, he added:

„There is a growing awareness in the banking sector that digital currencies represent a growth market with strong upside potential. Those who are leading the way in terms of regulatory approvals will be able to reap serious benefits through these relationships.