American banking giant JPMorgan Chase has reportedly agreed to offer banking services to cryptocurrency exchanges Coinbase and Gemini.
This is the first instance of the banking giant serving customers from the crypto industry, the Wall Street Journal reported citing undisclosed sources.
The report added that accounts of both exchange accounts were approved in April.
Under the arrangement, JPMorgan will offer these cryptocurrency exchanges deposit, withdrawal and transferring services with Automated Clearing House (ACH) infrastructure, sources told the WSJ.
This is seen as a major policy departure by the bank as few years back its CEO Jamie Dimon called bitcoin a ‘fraud’, which will eventually blow up.
“The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart,” Dimon said.
He said that bitcoin is “is worse than tulip bulbs” and predicted “it won’t end well.”
Dimon pointed out the absence of an underlying monetary base to support its value. “Currencies have legal support. It will blow up.”
Cryptocurrency exchanges always struggled to find reliable banking partners over concerns of fraud and money laundering. The news is expected to open a new option for bitcoin companies in the near future.
Coinbase is registered as a money services business with the Financial Crimes Enforcement Network, while Gemini received a trust charter in 2015 from New York’s Department of Financial Services.