Charles Schwab Could Offer Digital Assets This Year

Charles Schwab is looking for a partner to allow it to offer digital asset trading to clients in what would be yet another move by a traditional financial institution into cryptocurrency.  The $6.8 trillion-asset firm is reportedly considering several different digital […]

article-image

source: shutterstock

share

key takeaways

  • Schwab is considering several different cryptocurrency companies to white-label digital asset services, according to a report from The Block
  • The move is the latest in a series of traditional financial institutions looking to get into digital assets

Charles Schwab is looking for a partner to allow it to offer digital asset trading to clients in what would be yet another move by a traditional financial institution into cryptocurrency. 

The $6.8 trillion-asset firm is reportedly considering several different digital asset companies to white-label the services, and if successful would launch the new services by the end of this year, according to a report by The Block. 

The traditional banking and digital asset worlds have been slowly moving toward an eventual convergence for years. Anchorage, the “crypto bank” that custodies “billions of dollars” for banks in the US and abroad, has said it expects to see more banks embracing digital assets in their product offerings. Anchorage is also the partner to Visa on an API that allows banks to offer their customers bitcoin trading.

In November 2019, Schwab acquired its more more crypto-friendly rival TDAmeritrade, amid a tectonic shift in the brokerage industry in which both companies – as well as Fidelity Investments, E*Trade Financial, Ally Invest, and Interactive Brokers – dropped commission fees on online trades. The company immediately lost about 4% of its revenue in doing so and has been keen to make it up with new business.

As more banks and fintech companies seek to differentiate with digital asset services, customer acquisition and engagement will become the key differentiator. Schwab has 30.5 million accounts across all of its services, about the same number of users Square Cash App has. Offering digital asset trading would make Schwab a competitor to companies like PayPal and Square as well as megabanks like JPMorgan Chase, which have yet to give their cryptocurrency blessings (although LMAX Group’s David Mercer bets more than one will begin trading digital assets this year).

Schwab is the latest old-guard financial institution seeking to expand its strategy to include digital assets. Morgan Stanley now owns more than 10% of Microstrategy equity; and BNY Mellon, the oldest US bank and the largest custodian globally, recently revealed plans to offer banks digital asset custody

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png

Research

With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.

article-image

Launching cryptocurrencies the old fashioned way may soon make a return

article-image

Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug

article-image

NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.

article-image

EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down