Crypto Assets exchange gains support from major banks, marking the industry's integration into mainstream finance

JPMorgan Chase has recently taken an important step into the crypto assets field. According to reports, the bank will provide banking services to the crypto assets exchanges Coinbase and Gemini, which were approved to open bank accounts in April. In the initial phase of this cooperation, JPMorgan will offer cash management services to these exchanges' U.S. clients, including wire transfers and deposit/withdrawal operations, but will not directly participate in the clearing of crypto assets.

This move is seen as an important milestone for the Crypto Assets industry in gaining mainstream financial recognition. Industry insiders believe that, in addition to direct revenue considerations, this may provide JPMorgan with opportunities to underwrite the future IPOs of Coinbase and Gemini, as well as the possibility of listing its own digital coin on these platforms.

Regulatory officials have stated that as the Crypto Assets market matures, more and more blockchain companies possess good risk control and compliance levels, and such companies should not be hindered in terms of banking services. However, establishing a long-term and stable cooperative relationship between the Crypto Assets industry and traditional financial institutions will still take time.

This cooperation can be said to be the result of both parties being "in perfect harmony". JPMorgan hopes to seize opportunities in emerging fields under the premise of compliance, while Coinbase and Gemini need the support of traditional financial institutions to develop into more professional financial service platforms and venture into a broader institutional market.

The high compliance of Coinbase and Gemini, as well as their characteristics of primarily settling in fiat currency, perfectly align with the regulatory demands of banks. Both exchanges excel in financial transparency and have passed audits by well-known accounting firms. In terms of capital flow, fiat currency dominates on both platforms, providing banks with considerable profit potential.

It is worth noting that Coinbase and Gemini have a wide range of services, which include not only exchanges but also custody, stablecoins, and wallets, all of which have a significant demand for fiat services. For example, the stablecoins USDC and GUSD issued by the two companies adopt a fiat-collateralized model, and their total market capitalization is currently about 800 million dollars. The related custody of funds and fiat deposit and withdrawal fees also serve as considerable sources of income.

Although JPMorgan's CEO previously held a negative view of Bitcoin, the bank has been at the forefront of exploration in the blockchain field. In recent years, JPMorgan has launched the open-source blockchain protocol Quorum, the Interbank Information Network (IIN), and has become the world's first large bank to issue digital currency.

However, before this major cooperation takes effect, the relationship between the Crypto Assets industry and banks has been in a state of high uncertainty. Even cautious exchanges like Coinbase have previously interrupted cooperation with several banks due to compliance issues. The story of Tether and Bitfinex is even more striking, as their collaborations with multiple mainstream banks have all failed, and the current state of banking cooperation remains unknown.

This situation reflects the contradiction between the Crypto Assets industry and traditional banks: banks covet the profits of the Crypto Assets market but are concerned about compliance risks. In China, due to regulatory policies, the domestic Crypto Assets industry has become "insulated" from banks.

Coinbase and Gemini have successfully gained support from mainstream banks, while Tether and Bitfinex are still seeking stable partnerships. This may mark a turning point for the Crypto Assets industry: institutions striving to align with the mainstream will ultimately integrate into the traditional financial system, while others may continue to operate in regulatory gray areas, although their long-term development prospects remain in question.