According to a report in WSJ.com, JPMorgan is now offering banking services to two well known digital asset exchanges – Coinbase and Gemini.
Typically, digital asset exchanges have been shunned by big banks as compliance officers have viewed the risk as too large fearing the wrath of bank regulators. Coinbase and Gemini are two of the largest digital asset exchanges in the US and have adhered to compliant operations.
The report states approval came in April with transactions starting in May with the bank mainly handling cash management services like processing wire transfers, deposits, and withdrawals. Apparently, the services do not specifically include Bitcoin or crypto transactions.
Coinbase and Gemini are said to have gone through a long vetting process by the bank – a process that must have reviewed the exchanges AML/KYC processes.
Perhaps the most important takeaway is the growing acceptance of traditional finance of digital assets and the recognition these businesses are not only viable but thriving globally. JPMorgan most certainly discussed the relationship with Coinbase and Gemini with federal regulators.
Both exchanges are currently regulated by multiple entities in the US including being registered with FinCEN.