The $9 trillion broker rolled out Schwab Crypto to a first cohort of US retail clients on May 13, priced well below Coinbase's standard fee, with custody handled inside a chartered bank rather than an exchange.
Charles Schwab opened spot bitcoin and ether trading to a first cohort of retail clients on Wednesday morning, priced at 75 basis points per dollar of trade value, with Paxos executing the orders and Schwab Premier Bank acting as primary custodian. The platform is available across Schwab.com, Schwab Mobile, and the thinkorswim terminal. New York and Louisiana clients are excluded from the initial rollout for state-specific regulatory reasons.
The launch is the moment a $9 trillion broker finally lets its retail base buy bitcoin without an ETF wrapper, and the pricing is the part that should worry every standalone exchange. Schwab's 0.75 per cent fee compares with roughly 1.5 per cent at Coinbase for the same transaction size, and it is structured as a single take-rate rather than the maker-taker spread the exchanges built their margins on. For a customer who already sits inside Schwab's platform and pays nothing to trade equities, the friction of opening a Coinbase account drops below the value Coinbase charges to keep them.
Paxos doing the trade execution is the second-most interesting line in the press release. Paxos has been the unglamorous plumbing behind PayPal's PYUSD, Interactive Brokers' crypto offering, and parts of the Robinhood retail flow for years; it now adds the second-largest broker in the United States. The firm has quietly stitched together a custody-and-execution layer that lets traditional brokers offer crypto without ever touching a hot wallet or building an internal compliance function specific to digital assets. Whatever Paxos earns on order flow from Schwab is the lowest-risk crypto revenue line in American finance.
The custody arrangement is genuinely novel. Schwab Premier Bank — a chartered bank inside the Schwab parent — is the primary custodian, with Paxos providing sub-custody. That puts FDIC-eligible cash and uninsured crypto on overlapping balance sheets in a way the OCC and FDIC are still adjudicating, and it means a retail Schwab client's bitcoin sits inside a bank holding-company structure that is supervised by the Fed. Coinbase has spent the last three years trying to convince regulators that it should be allowed to custody crypto inside a bank-like entity. Schwab just did it.
The list of cryptocurrencies is, for now, two. Bitcoin and ether are the only assets available at launch, and Schwab has said additional tokens will be added "over time" without committing to any specific name. Internal transfers — moving existing crypto in from Coinbase or Kraken — are not yet supported, which means the first tranche of Schwab Crypto volume will be cash buying rather than migrated balances. That is a slower ramp than the company could have engineered with a transfer button, but it also means every dollar of crypto AUM on the platform is incremental rather than a poached deposit.
The competitive geometry has shifted considerably. Fidelity has had crypto for institutional clients for years and added retail access in 2022. Robinhood has been crypto-native since 2018. Interactive Brokers has offered crypto since 2021. What none of them carried into 2026 was Schwab's roughly 34 million active brokerage accounts and the inertia those clients have. Schwab's average retail customer is older, wealthier, and slower to switch than the demographic Coinbase built its business on. They were the largest pool of capital in American finance that had not yet been offered direct crypto exposure by their primary broker. They have been now.
The 75 basis points is also a floor, not a target. Schwab moved equity commissions to zero in 2019 by accepting that retail brokerage margins were going to compress regardless; the same logic almost certainly applies to crypto. The fee at launch is set high enough to fund the operational build-out and low enough to materially undercut the standalone exchanges, and there is no obvious reason the figure cannot move to 25 basis points within eighteen months once the volumes warrant. Coinbase's restructuring memo a week ago acknowledged that AI and broker competition were forcing the company to operate at lower headcount and lower margin — but the rollout today is the first time the broker side of that equation has appeared in the wild.
The other casualty in the picture is Robinhood, which has been treating crypto as its primary growth engine for two years. Crypto revenue at Robinhood fell 47 per cent in Q1, and Vlad Tenev used the earnings call to pivot the whole story to tokenisation. The cohort Robinhood was hoping to keep — first-time retail buyers, mostly in the 25-to-40 bracket — is precisely the cohort that already trusts Schwab and was waiting for it to add the asset class. The defection over the next eighteen months will be measurable.
Spot bitcoin ETFs gave Schwab clients a way to buy bitcoin via IBIT or FBTC starting last year. Spot trading is different. ETF buyers do not own coins — they own a claim on a fund that owns coins, and they pay management fees on top of the spread. Schwab clients who buy through the new platform will own the asset, can in principle move it to self-custody once transfers are enabled, and will pay 75 basis points once rather than 25 basis points annually. For long-term holders, the maths inverts the ETF advantage within roughly three years.
Schwab said the rollout will widen "in the coming weeks." New York and Louisiana clients remain locked out. The interesting question is which exchanges still have a margin business when Schwab has finished onboarding the rest.
