JPMorgan Chase & Co. has just joined the parade of Wall Street banks offering clients access to bitcoin funds, according to a CoinDesk news report.
The move gives wealthy clients access to an in-house, actively managed bitcoin fund, which was set up in partnership with NYDIG. The bitcoin-focused institutional technology and financial services firm also serves as custody holder.
JPMorgan told its financial advisers in a memo earlier this week that they can start taking buy and sell orders from its wealth management clients for five cryptocurrency products. However, advisors are not allowed to recommend specific crypto products but only buy and sell on behalf of clients’ request.
The largest bank in the United States has already begun using its own cryptocurrency to instantly send and settle payments around the world.
Dubbed ‘JPM Coin’, the stablecoin facilitates the transfer of payments between institutional clients. However, the coin are available only for international payments for large corporate clients who have undergone regulatory checks.
The development was massive for the wholesale payments business, as JP Morgan moves more than $6 trillion every day across more than 100 countries for its corporate clients. Additionally, it was the first real-world application for a cryptocurrency in banking, replacing decades-old networks like Swift, with more to come shortly after the international payments are tested.
JPMorgan, which its CEO Jamie Dimon once bashed bitcoin as a fraud that will not end well for its investors, created a new unit to handle its blockchain business called Onyx.
JPMorgan was not the only financial institution exploring the potential of cryptocurrency as part of its efforts to modernize the legacy payment systems.
Goldman Sachs has also reopened a trading desk to make markets in cryptocurrencies back in March.
The investment bank had announced similar plans back in 2018 before ditching the idea of a trading desk dedicated to crypto assets, citing regulatory uncertainty.
Having worked out security issues such as how it would custody the assets, the New York-based bank now is using its own money to trade with clients in a variety of non-deliverable forwards linked to the price of Bitcoin.
Elsewhere, Morgan Stanley has got involved in cryptocurrencies, launching access to three funds that enable ownership of bitcoin. The bank’s wealthier clients with “an aggressive risk tolerance” and have at least $2 million in assets can invest up to 2.5% of their net wealth in bitcoin funds.
BNY Mellon also revealed plans in February to provide its clients with ‘an integrated service’ for digital assets, which covers classic cryptocurrencies and could be extended to stablecoins.