Charles Schwab Launches Spot Bitcoin and Ethereum Trading at 75 Basis Points
Charles Schwab has begun a phased rollout of spot Bitcoin and Ethereum trading for retail clients through a new product called Schwab Crypto, marking the firm’s first move into direct digital asset trading across its 39 million active brokerage accounts. The platform charges 75 basis points per transaction, uses Paxos for sub-custody and execution, and launches without deposit or withdrawal functionality. This is a carefully controlled, compliance-first product that tells you far more about Schwab’s risk appetite than its enthusiasm for crypto.
What Schwab Is Actually Selling Here
Strip away the press release language and Schwab Crypto is a walled-garden product. Clients buy Bitcoin or Ethereum through Charles Schwab Premier Bank, which acts as custodian. Paxos, an OCC-regulated blockchain infrastructure firm, handles sub-custody and execution underneath that. The assets sit inside Schwab’s ecosystem, and at launch, they cannot leave it. No deposits from external wallets. No withdrawals to self-custody. Residents of New York and Louisiana are excluded entirely, which reflects ongoing state-level regulatory fragmentation that Schwab has no interest in fighting at this stage.
Jonathan Craig, Head of Retail Investing at Schwab, framed the launch predictably: “Clients want to conduct more of their financial lives at Schwab. With Schwab Crypto, they can trade digital assets within their existing accounts while drawing on the service, research, and tools they rely on.” Joe Vietri, Schwab’s Head of Digital Assets, described the goal as making Schwab “the destination of choice for retail investors who want to integrate digital assets into their portfolios with confidence.” Both quotes say the same thing: Schwab wants custody of your assets and your relationship, and crypto is the latest hook to achieve that.
The platform integrates across Schwab.com, the mobile app, and the thinkorswim trading suite. Bitcoin and Ethereum together represent roughly three-quarters of total crypto market capitalization, which is Schwab’s justification for starting there. Future expansion to additional assets and actual transfer functionality has been promised with no timeline attached, which means treat it as aspirational until proven otherwise.
Bitcoin BTC$62,278.00▲1.58%
Ethereum ETH$1,649.85▲0.50%
Tether USDT$0.9992▼0.02%
BNB BNB$595.30▲1.19%
USDC USDC$0.9999▼0.00%
XRP XRP$1.12▼0.75%
Solana SOL$65.17▲0.91%
TRON TRX$0.3227▲0.21%
Figure Heloc FIGR_HELOC$1.03▲0.02%
Dogecoin DOGE$0.0847▲0.36%The Fee Problem Is Real
Seventy-five basis points sounds modest in traditional brokerage terms. In crypto terms, it is expensive. Coinbase Pro charges well below that for most trade sizes. Robinhood buries its spread-based revenue model but effectively charges less in visible fees. Kraken’s maker-taker structure undercuts 75 basis points for any account with meaningful volume. Schwab is pricing this like a mutual fund transaction, not like a crypto exchange, and that choice is deliberate. It reflects a client base that has historically tolerated higher fees in exchange for brand trust and consolidated account management.
Bloomberg reportedly characterized Schwab’s spot crypto offering as a “tough sell,” and on the fee question alone, that assessment holds. The question is whether Schwab’s existing client base, which according to the firm’s own survey prioritizes low fees, brand trust, and secure custody, will accept 75 basis points when cheaper alternatives exist. The answer depends entirely on whether those clients were ever going to use a crypto-native exchange in the first place. Many of them were not. Schwab is not trying to poach Coinbase’s active traders. It is monetizing the enormous pool of traditional investors who want Bitcoin exposure without creating a separate account somewhere unfamiliar.
Who Actually Benefits From This Launch
Schwab wins the most here, and the mechanism is straightforward. The firm manages $12.22 trillion in client assets and already holds roughly 20 percent of all spot crypto exchange-traded product ownership through its brokerage platform. Schwab clients were already buying Bitcoin ETFs. Now Schwab can capture the spread on direct spot trades instead of routing that business to BlackRock, Fidelity, or anyone else. This is margin recapture dressed up as product innovation, as we outlined when Schwab’s structural shift into spot crypto first became apparent earlier this month.
Paxos benefits materially as well. Being selected as the execution and sub-custody infrastructure partner for a firm of Schwab’s scale is a significant commercial endorsement of the OCC-regulated trust model. It validates the regulatory path Paxos has pursued and likely improves its positioning with other traditional financial institutions evaluating similar moves. The broader TradFi-into-crypto convergence theme, visible across Kraken’s IPO process and Deutsche Börse’s $200 million stake in crypto infrastructure, accelerates further with Schwab’s entry.
Coinbase and Robinhood face genuine competitive pressure, but not from the product itself. They face it from distribution. Schwab’s 39 million active accounts represent a massive addressable market that Coinbase has never reached efficiently. If even a small percentage of those accounts activate Schwab Crypto, the absolute volume numbers matter even at a higher per-trade fee. That said, crypto-native users who already know how to manage a Coinbase account are not switching to a closed-loop system with no withdrawal capability. Schwab is not going after them, and it would lose if it tried.
What the Closed-Loop Design Reveals
The absence of deposit and withdrawal functionality at launch is the most telling structural decision Schwab made. It means clients cannot bring Bitcoin they already own into the platform, and they cannot take Bitcoin out to cold storage or a hardware wallet. Every asset purchased through Schwab Crypto stays inside Schwab’s custody environment. From a compliance standpoint, this eliminates an enormous range of KYC and blockchain monitoring obligations around incoming transfers of unknown provenance. From a business standpoint, it ensures Schwab retains custody and the fee relationship indefinitely.
This design is antithetical to the core value proposition of owning cryptocurrency, which is self-sovereign control of an asset with no counterparty dependency. Schwab Crypto is not that. It is a crypto-denominated brokerage position, similar in economic substance to holding a Bitcoin ETF but without the liquidity advantages of an exchange-traded wrapper. The Bitcoin network itself is running at a hash rate of approximately 1,050 EH/s at time of writing, with roughly 104,545 blocks remaining until the next halving. That is a network operating at record security levels, but none of that cryptographic robustness transfers to Schwab Crypto clients who hold no private keys and have no withdrawal rights at launch.
Prediction Markets and the Bigger Ambition
Schwab CEO Rick Wurster indicated this week that the firm is actively weighing a move into prediction markets, per reporting from Decrypt. That is worth registering as a signal of how broadly Schwab is thinking about alternative asset products, not just crypto. Schwab reported first-quarter earnings of $1.43 per share on $6.48 billion in revenue, slightly below analyst expectations but with record profitability. It is expanding into digital assets from a position of financial strength, which means these product decisions are strategic choices, not desperation plays.
The sequencing here is calculated. Launch with the two most liquid, most recognizable assets. Charge a premium fee. Keep the architecture closed. Build client familiarity and capture regulatory goodwill. Then expand the asset list, open transfers, and potentially reduce fees once scale justifies it. This is exactly how a firm managing $12 trillion in assets enters a volatile, reputationally sensitive product category. Measured, controlled, and oriented toward capturing the existing client base before fighting for new ones.
Schwab Crypto will accumulate assets under management faster than most crypto-native competitors will admit, purely because of distribution. The product is constrained and expensive by crypto standards, but it does not need to be competitive with Coinbase to succeed on Schwab’s own terms. The 75 basis points will generate real revenue at scale. The walled garden will hold most retail users who lack the technical motivation to leave. And when Schwab eventually opens transfers and adds altcoins, it will frame that as product maturation rather than catching up to where the industry already was. That is how incumbent firms play this game, and they are not wrong to do it.
