US banking conglomerate JPMorgan may soon launch a crypto clearinghouse unit which will increase liquidity in the market, Forbes has reported citing several sources. One of the magazines's sources has said:
"We will fundamentally need a crypto clearinghouse to see that liquidity. Once that exists, banks will move their liquidity to it."
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Clearing services act as intermediaries between buyers and sellers in the financial markets and are responsible for confirming and closing trades.
A JPMorgan spokesperson has said this service is necessary to avoid problems such as those faced by users of the popular broker Robinhood. As indicated by Forbes, JPMorgan's service would be used to execute cryptocurrency transactions in the OTC market. Rob Rosenthal, head of the blockchain project Revolution Populi and a former Goldman Sachs veteran, says:
"All the banks that are starting bitcoin and cryptocurrency trading desks, none of them have a clearinghouse behind them."
It has recently been known Goldman Sachs is working on the development of its own cryptocurrency trading division.