Banking giant JPMorgan is reportedly looking to work with a crypto clearinghouse to add liquidity to the market.
Forbes reported the news on Monday, citing a “senior JPMorgan executive,” who spoke with the publication “on background.” The executive said, “we will fundamentally need a crypto clearinghouse to see that liquidity. Once that exists, banks will move their liquidity to it.”
Clearinghouses act as a middleman between buyers and sellers in financial markets. They validate and finalize transactions, ensuring that both buyers and sellers honor their contractual obligations. The executive said crypto clearinghouses are needed to avoid “the kind of liquidity problems that trading app Robinhood ran into.”
The Block has reached out to JPMorgan for comments and will update this story should we hear back.
JPMorgan’s managing director Gary Chan is a “clearing house advisor” for Revolution Populi, which is reportedly raising funds to build a blockchain-based clearinghouse.
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