According to Forbes, JPMorgan has been thinking about entering a cryptocurrency clearing house for a year. Recently, as the price of bitcoin and cryptocurrency has skyrocketed, the interest of institutional investors has increased. The cryptocurrency market is equipped with an inexperienced trading system, such as having to deposit funds through over-the-counter transactions or exchanges. Investors’ trading risk is increased and the OTC trading desk has to take all the cryptocurrency fiduciary responsibilities.
In this situation, JPMorgan intends to play the role of an intermediary that will create liquidity in the market and ensure smooth transactions between the OTC trading desk and investors through the cryptocurrency clearing house. According to Forbes, an executive at JPMorgan said, “To find this liquidity, you will need a cryptocurrency clearing house fundamentally. If there is a clearing house, banks will move liquidity there.”
“If there is a clearing house, cryptocurrency brokers and exchanges can avoid the liquidity problem that Robin Hood suffered,” he added. The trading app Robin Hood temporarily blocked transactions due to cash flow problems during the game stop surge. JPMorgan officials did not say anything about the specific cryptocurrency clearing house plan.
Goldman Sachs has also revived its bitcoin and cryptocurrency trading desk in three years. The interest rate of large Wall Street banks in Bitcoin spot futures transactions has increased considerably. Forbes reported that Revolution Populi, who is pursuing financing to build a blockchain-based real-time clearing house, has joined Gary Chan JPMorgan, managing director, to the clearing house advisory team.