JPMorgan is looking for a crypto clearinghouse: Report

Mar 16, 2021 | The Block News | 0 comments


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.”

Last month, Robinhood had to limit the buying of stocks such as GameStop, ostensibly due to liquidity issues. Just hours after the restrictions, the firm raised $1 billion from existing investors.

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.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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