JPMorganChase (JPM) - Get Report has begun offering banking services to large bitcoin exchanges Coinbase Inc. and Gemini Trust Co, in a sign of Wall Street’s growing comfort with working with cryptocurrency companies.
According to people familiar with the matter cited by the Wall Street Journal, it’s the first time that JPMorgan Chase has taken on clients from the cryptocurrency world.
Coinbase is the largest U.S.-based bitcoin exchange with more than 30 million accounts, while Gemini, which was started by Tyler and Cameron Winklevoss, has pushed for the industry to be adopted by regular customers and to receive regulatory approvals for cryptocurrency investments.
JPMorgan Chase is primarily providing cash-management services and taking care of dollar-based transactions for the two firms’ U.S. based-customers, according to the Journal’s sources. It will also process wire transfers and deposits and withdrawals using an electronic funds-transfer system.
The transfers and cash management services will allow customers of Coinbase and Gemini to move money between their cryptocurrency accounts and their traditional bank accounts.
Coinbase and Gemini had to endure a lengthy vetting process to get JPMorgan’s approval, according to the Journal’s sources. Both companies are regulated by multiple parties, with Gemini receiving a trust charter from the New York State Department of Financial Services (DFS), while Coinbase is registered as a money services business with Financial Crimes Enforcement Network and also has a license for crypto businesses from the DFS.
Bitcoin’s price recently hit as high as $10,000, more than doubling since, March although on Tuesday morning it was trading at about $8,800.