JPMorgan Extends Banking Services To Bitcoin Exchanges (coindesk.com) 15
According to The Wall Street Journal, JPMorgan Chase has taken on Coinbase and Gemini Trust as banking customers (Warning: source paywalled; alternative source) -- "the first time the bank has accepted clients from the cryptocurrency industry." From the report: The move is the latest in a string of positive developments for bitcoin and another sign that Wall Street is becoming more comfortable with the business of cryptocurrencies. Coinbase, founded in 2012, is the largest U.S.-based bitcoin exchange, with more than 30 million accounts. Gemini, founded in 2014 by Tyler and Cameron Winklevoss, is a smaller exchange, but it has been in the vanguard of the industry's movement to attract mainstream clients and embrace regulation. The accounts were approved in April, and transactions are just starting to be processed, the people said.
The bank is primarily providing cash-management services to the firms and handling dollar-based transactions for the exchanges' U.S.-based customers, according to the people. It will process wire transfers, and deposits and withdrawals through the Automated Clearing House network, an electronic funds-transfer system. Although Coinbase and Gemini are built around trading cryptocurrencies, many of their customers link traditional bank accounts to their accounts on the exchanges. Handling transfers in and out of those bank accounts requires a payments processor. JPMorgan's services don't extend to any bitcoin or cryptocurrency-based transactions. The firms handle those themselves.
The bank is primarily providing cash-management services to the firms and handling dollar-based transactions for the exchanges' U.S.-based customers, according to the people. It will process wire transfers, and deposits and withdrawals through the Automated Clearing House network, an electronic funds-transfer system. Although Coinbase and Gemini are built around trading cryptocurrencies, many of their customers link traditional bank accounts to their accounts on the exchanges. Handling transfers in and out of those bank accounts requires a payments processor. JPMorgan's services don't extend to any bitcoin or cryptocurrency-based transactions. The firms handle those themselves.
JP Morgan won't see or touch a bitcoin (Score:5, Informative)
How is this demonstrating acceptance of Bitcoin? They are hardly the first regular bank to allow a client to accept bitcoins.
Re: (Score:1)
> In other words JP Morgan will not see or touch a bitcoin
Last I heard (from working there), JPMC has an ongoing internal project to create their own blockchain currency. This looks like a pretext to the eventual release.
Re: (Score:3)
> In other words JP Morgan will not see or touch a bitcoin
Last I heard (from working there), JPMC has an ongoing internal project to create their own blockchain currency. This looks like a pretext to the eventual release.
Well in the sense of getting Coinbase to support their coin so it can be purchased via bitcoin etc. Its hard to imagine a large bank accepting anything other than fiat for their coins themselves. Coinbase will probably act like a merchant bitcoin payment processing service for Chase, firewalling Chase from bitcoins etc.
Re: (Score:2)
They want in on that action (Score:2)
They know transactions are about to go through the roof and they want in on that action.
Embracing regulation (Score:2)
The key phrase in the summary here is "embrace regulation". Giant international banks like JPMorgan can find themselves paying hefty fines, and seeing executives go to jail, of they do not properly vet their customers. They are expected to take "reasonable" steps to ensure their customers are not involved in money laundering, terrorism, or other criminal enterprises. The definition of "reasonable" is up to the courts *after* any scandal comes to light, so they hold to standards they feel will be defensib
Re: (Score:2)
I'm wondering how this works with existing regulations regarding money laundering and providing financial services to criminals. I have a very primitive understanding of it but I thought the idea was to separate trusted cash flows from untrusted, hence the "know your customer" rules. Basically, once a customer is vetted by one bank, they and their cash flows can be trusted by all other banks.
Bitcoin exchanges provide a service which facilitate money laundering and criminal enterprises by not "knowing their
NO they are not EMBRACING bitcoin (Score:1)
This is LIKE a story, except lacking in a story. These banks are providing US Dollar management services. Period. Full stop.
They are having NOTHING to do with Bitcoin. The only relationship to BTC is that the business these banks ARE WILLING TO TAKE DOLLARS FROM AND STORE AND DISPENSE (again, dollars, not BTC) are exchanges.
Rest assured. NO LARGE BUSINESS IN THE US ACCEPTS BTC. They all will happily accept your exchange-converted BTC in USD. They don't touch the BTC. They have nothing to do with the