Blockchain technology is already being used in several industries including the food & beverage industry, cybersecurity as well as within the financial services industry. Bitcoin is one of the most popular and most widely accepted cryptocurrencies. Bitcoin, being a digital currency, allows 2 parties to transact directly with each other without the need of a third party while also maintaining a record of the transaction. Let’s know Does JP Morgan Accept Bitcoin?
The reason for Bitcoins popularity is the fact that the payments are made faster, cheaper, safer and are less volatile than many local currencies.
JP Morgan Chase is one of the first in the U.S banking sector to adapt to cryptocurrency more particularly to bitcoin and offer access to bitcoin funds to its clients. Though accepting bitcoins as an asset class was a significantly large and risky step for JP Morgan, they did so after their clients demanded more exposure to cryptocurrency. However, bitcoin investments have been limited to as low as 2.5% of JP Morgans total net worth as stated by articles.
The investment bank, JP Morgan Chase through an internal memo told its clients that it is launching access to three funds that would enable ownership of bitcoins to its clients. One fund is a joint effort from FS Investments and NYDIG while the other two funds are from Galaxy Digital, founded by Mike Novogratz.
Well established financial institutions are often hesitant to provide banking services to cryptocurrency businesses. Coinbase and Gemini are two of JP Morgans first Bitcoin clients. They had to go through a long and hard investigation before getting JP Morgans approval.
JP Morgan’s CEO Jamie Dimon himself was very against cryptocurrency back in 2017, calling bitcoin “a fraud”. However, he eventually changed his mind when a couple of months later he made a statement saying he regretted making those bitcoin remarks.
Why is the Banking industry hesitant in accepting Bitcoins?
Banks view bitcoins as an industry disruptor and a potential market anchor. The main reason is that the bitcoin and in general the crypto market is highly volatile. This volatility is what makes purchasing bitcoins using credit cards so risky for banks and financial institutions due to the possibility of not having enough funds in the future to fulfill the repayment requirements.
However, to overcome this many banks have resorted to charging an additional ‘cash advance’ fee which could be as high as 23.99%. This fee is not the same as the exchange’s transaction fees, which are also being charged along with this fee.
Are there any restrictions with regards to bitcoins imposed by JP Morgan Chase?
According to sources, Investment firms need to meet the following two criteria to qualify:
- Have an account that is at least 6 months old
- Contain a minimum of $5 million at the bank
Even after fulfilling the above 2 requisites, JP Morgan is limiting bitcoin investments to as low as 2.5% of the total net worth to minimize risks.
Who is JP Morgans Bitcoin Clients?
JP Morgan Chase has started to accept clients from the cryptocurrency industry and two of its prominent bitcoin exchanges are: Coinbase Inc. and Gemini Trust Co., who have now become customers of the company.
However, JP Morgan Chase is mainly providing its two clients with cash-management services. It is handling dollar-based transaction including processing deposits and withdrawals for their U.S. based customers.
What is the JPM Coin?
JPM Coin is the name of the digital currency launched by JP Morgan Chase & Co.
The JPM Coin is a digital coin designed to make instantaneous payments using blockchain technology as stated on their website.
Which other company accepts Bitcoins?
Many companies are looking at new ways to use and adapt to cryptocurrencies and bitcoins while providing customers with extended opportunities and setting themselves apart from their competitors. Even government agencies have now started to accept bitcoin as a mode of exchange. The following retailers are some of the first few in the industry to accept Bitcoin:
- Microsoft
- Starbucks
- Home Depot
- Whole Foods
- Just Eat
- Twitch
- Wikipedia
Is Ethereum more widely accepted than Bitcoin?
Ethereum and other altcoins are accepted at much fewer merchants than Bitcoin. Bitcoin is being accepted by larger and smaller giants in the industry. According to a survey by HSB, it is found that 36% of small-medium businesses in the US accept Bitcoin.
While not all places or rather while not most places have still not accepted Bitcoin directly as a source of exchange, the adoption of Bitcoin is increasing year after year. Seeing Big Giants like Microsoft, AT&T, JP Morgan taking their first step towards accepting bitcoins has led small and medium businesses to take a step in this direction as well.
These days, if one is willing to look hard enough, they can spend their bitcoins anywhere, whether directly or through third party. While some of these methods might not be very conventional or easy to use yet there is light at end of the tunnel for cryptocurrency.