Schwab Crypto Launches at 0.75%, and the Fee Race Falls on Coinbase

Charles Schwab launched Schwab Crypto on May 12, offering spot bitcoin and ethereum trading at 0.75% per trade to an initial group of its 39.1 million retail brokerage clients. The account, housed inside Charles Schwab Premier Bank and powered by Paxos for trade execution, goes live on a unified dashboard alongside stocks, bonds, and exchange-traded products (ETPs, pooled funds that track asset prices) across Schwab.com, the mobile app, and the thinkorswim trading platform.

The launch does not introduce Schwab’s clients to digital assets. The firm’s own data shows its customers already hold roughly 20% of all assets parked in U.S. spot crypto ETPs. What changed is that a 52-year-old brokerage carrying $11.77 trillion in client assets just replaced the fund wrapper with a direct trade, and every competitor now has a new rate card to beat.

The Fee That Rewrites the Room

Schwab set its rate at 0.75% (75 basis points) on the dollar value of each transaction. That single number put Fidelity’s 1% crypto charge above the new benchmark, positioned Morgan Stanley’s E*TRADE crypto service at 0.50% as the current low-fee leader among traditional brokerages, and framed Coinbase’s retail fees, which can reach 4% for standard transactions, as something closer to a premium convenience charge than a competitive price.

Schwab is not chasing Coinbase’s power users, the traders who bring their own wallets and work across dozens of tokens and leverage products. Its audience is the conservative investor already managing an index fund portfolio at Schwab who wants bitcoin in the same account view. A Schwab survey of 460 current and prospective crypto investors, conducted in summer 2025, found that the top three criteria for choosing a crypto platform were low and transparent pricing, brand reputation, and security of assets. Those criteria describe a Schwab client more precisely than a Coinbase Advanced Trade subscriber.

Bitcoin and ethereum together represent approximately three-quarters of total crypto market capitalization, according to the official Schwab Crypto product announcement from April 16. The firm confirmed plans to expand the coin selection and eventually enable deposits and withdrawals of digital assets clients already hold at external platforms. For now, the launch is deliberately narrow: two assets, a flat fee, a waitlist the firm is working through in waves.

Inside Schwab Crypto’s Architecture

Schwab Crypto accounts sit inside Charles Schwab Premier Bank, SSB, a Federal Deposit Insurance Corporation (FDIC)-member subsidiary that serves as the primary custodian of client digital assets. Paxos, an Office of the Comptroller of the Currency (OCC)-regulated blockchain infrastructure firm, provides sub-custody and handles trade execution underneath the bank layer. From the client’s perspective, a linked crypto balance sits beside the existing brokerage account on the same dashboard used for stocks and funds.

With Schwab Crypto, clients who want direct access to the asset class can trade it alongside their other investments, while benefiting from the service, education, and research they expect from us.

Jonathan Craig, Head of Retail Investing at Charles Schwab, made that statement in the April 16 press release announcing the phased rollout.

Geography limits the initial addressable pool. New York and Louisiana residents cannot open Schwab Crypto accounts in this phase. U.S. territories and international jurisdictions are also excluded. Applicants go through review and approval, meaning the full account base does not unlock simultaneously but instead joins in controlled waves as eligibility expands.

One structural point separates Schwab’s model from a self-custody exchange. Schwab Premier Bank holds the assets; Paxos runs execution beneath it; the client never controls a private key. Investors comfortable with the custodial brokerage model will find it familiar. Those who insist on self-sovereignty will not find what they need here, and Schwab is not competing for them.

Coinbase and Robinhood Already Felt It

Financial markets registered Schwab’s entry before the first client trade was executed. When Schwab unveiled the platform details on April 16, shares of Coinbase Global (Nasdaq: COIN) and Robinhood Markets (Nasdaq: HOOD) each dropped roughly 3% on the day. The sell-off was a straightforward read-through: a firm managing nearly $12 trillion in assets was entering a market both companies had built significant revenue around, at a fee sitting between their existing floor rates.

Robinhood’s crypto revenue line is the most exposed. Published fourth-quarter 2025 results showed crypto transaction revenue declining 38% year over year to $221 million. Its defensive posture is diversification: total first-quarter 2026 revenue reached $1.067 billion, supported by record Robinhood Gold subscribers at 4.3 million, and the firm has been redirecting its growth story toward subscriptions, prediction markets, and banking products rather than depending on spread-driven crypto income.

The exchange picked a different countermeasure. Rather than trimming retail fees, it launched commission-free stock trading for U.S. clients in January 2026, and Kraken followed with its own equity product around the same period. Both moves reflect a two-directional arms race: crypto-native platforms are building brokerage capabilities while traditional brokerages are building crypto access. Schwab, already at $0 for equities and now 0.75% for crypto, has arrived at both positions simultaneously, which is precisely where the structural pressure on the pure-play exchanges accumulates.

The 2019 Commission Collapse, Revisited

In October 2019, Schwab cut its stock trading commission to zero. TD Ameritrade matched within days. E*TRADE and Fidelity followed within a week. The equity commission business, once a dependable revenue line across the brokerage industry, disappeared in under ten days. No firm announced a coordinated strategy; each matched the one before it because the client acquisition math made inaction more expensive than capitulation.

The current setup has the same geometry. Morgan Stanley entered E*TRADE crypto trading at 0.50%, 25 basis points below Schwab, serving 8.6 million E*TRADE clients with access to bitcoin, ethereum, and solana. Fidelity holds at 1% and has not moved. Vanguard has declined to offer direct crypto access entirely. The compressed band running from 0.50% to 1.00% for institutional-grade brokerages mirrors the band equities occupied in 2018 and early 2019, the year before Schwab broke it open.

What accelerated the commission collapse was not pricing ideology but client flow data. Schwab grew its account base faster at zero commission and monetized the incremental assets through net interest income and advisory fees, more than recovering the trading revenue it surrendered. The same monetization logic runs in 2026: crypto fees are still meaningful at 0.75%, but a firm willing to go lower captures a disproportionate share of new account openings among investors deciding where to consolidate their financial life, and makes back the margin through every other product that account eventually touches.

Rick Wurster, CEO of Charles Schwab, has framed the crypto build as part of making clients’ “whole financial lives” accessible in one place. That positioning signals the firm is playing for account retention and wallet-share expansion as much as it is playing for crypto fee revenue specifically. Fidelity’s 1% hold and Vanguard’s full abstention are both defensible positions for now; neither looks permanent if Schwab’s lower rate begins registering visibly in the quarterly asset flow reports both companies monitor closely.

A Record Quarter Behind a Lagging Stock

Schwab’s first-quarter 2026 results came out the same morning as the crypto announcement, and the numbers were the strongest in the firm’s history.

• $6.48 billion in total net revenues, up 16% year over year
• $2.48 billion in net income, up 30% year over year
• $1.37 diluted earnings per share (EPS), up 38%; adjusted EPS reached $1.43
• 49.2% pre-tax profit margin, up from 44% in Q1 2025
• $140 billion in core net new assets gathered during the quarter alone

SCHW shares fell roughly 5% on April 16 regardless. Revenue matched some estimates rather than clearing them, and lingering cash sweep litigation held its place on the bear case’s list. With the stock trading around $90 at publication, the gap to the analyst consensus target of approximately $115.85 represents about 22% implied upside. Schwab’s Q1 2026 10-Q filed with the SEC shows a trailing price-to-earnings (P/E) ratio of 17.4, set against a Capital Markets industry average of 40.1. Deutsche Bank raised its target to $127; JPMorgan analyst Kenneth Worthington, Head of Brokerage and Exchange Research at JPMorgan, lifted his target to $131. Of 22 analysts covering the stock, 19 carry buy-equivalent ratings.

The discount reflects identifiable concerns rather than business deterioration. Cash sweep litigation and rate sensitivity are the two levers the bear case uses; neither touches the underlying compounding story. Schwab raised its quarterly dividend 19% to $0.32 per share, repurchased 24.3 million shares for $2.4 billion in Q1 alone, and completed a $636 million acquisition of Forge Global Holdings, a private markets platform, on March 2. A firm running a 40% return on tangible common equity at 17.4 times trailing earnings leaves a visible gap between where the business operates and where the stock prices it.

The Platform Arms Race

The demographic signal in Schwab’s own earnings commentary sharpens the competitive timeline. Roughly one-third of new retail accounts opened in 2025 came from customers under 28, a cohort that expects bitcoin in the same interface as an S&P 500 index fund. Schwab built the product its own account-opening data was already predicting. Schwab’s cryptocurrency account sign-up page remains open for investors on the waitlist as the firm expands eligible access.

The competitive picture over the next five months turns on decisions neither Fidelity nor the crypto-native platforms have announced. If the current 1% brokerage fee floor gives way before year-end, the band for regulated crypto trading narrows to a range where integration, trust, and account depth determine market share rather than price alone. If Coinbase cuts its Advanced Trade fee below 0.50%, the compression cycle accelerates across the whole market and traditional brokerages face a race they have run before. Schwab enters that contest with the largest U.S. retail brokerage account base, a record earnings quarter, and 39 million clients who have not yet been asked what they want to do with bitcoin. Morgan Stanley is already at 0.50%. In October 2019, that kind of gap closed in under a week.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security or digital asset. Cryptocurrency investments involve significant risk, including the potential loss of principal. Figures cited reflect publicly available data accurate as of publication date. Readers should consult a qualified financial professional before making any investment decisions.