Coinbase dives deeper into banking by letting users deposit paychecks into their accounts
27 Sep 2021
Cryptocurrency exchange Coinbase is going deeper into traditional financial services, allowing users to deposit their paycheck directly into their online account.
Coinbase said on Monday that U.S. users will be able to use the direct deposit service for any percentage of their paycheck. They can hold their money in dollars or immediately transfer it into cryptocurrencies like bitcoin with no fees.
“With direct deposit, customers can more easily access our crypto-first financial services and be ready for any trade or purchase,” Max Branzburg, vice president of product at Coinbase, said in the blog post. “We’re determined to deliver the most trusted full suite of crypto-first financial services to our 68 million users.”
The launch, which goes live in the coming weeks, comes after customers complained that frequent transfers from their bank accounts to Coinbase are “time-consuming and inconvenient,” the company said. Coinbase added that it aims to give “instant access to the cryptoeconomy.”
Coinbase said it will use an FDIC-insured bank partner for direct deposit but did not specify which one. The company works with Meta Bank for its Coinbase rewards card.
Other popular online finance apps already allow for direct deposit. Online banking companies like Chime and SoFi provide the service as part of a broad portfolio of products, while PayPal and and stock-trading app Robinhood also let users deposit their paychecks.
Coinbase is rolling out new offerings while simultaneously trying to navigate a complicated regulatory environment. Last week, the company canceled plans for a high-interest lending product after the SEC threatened to sue over it.
Coinbase CEO Brian Armstrong called it “really sketchy behavior coming out of the SEC recently.” Armstrong also claimed the agency refused to meet with the company, and gave “zero explanation as to why.”
SEC Chairman Gary Gensler has sharpened his criticism of the cryptocurrency industry. In testimony to the Senate Banking Committee, Gensler called for more more crypto oversight. He also asked for additional resources from Congress to ensure investor protection and argued that most digital assets traded need to register with the agency.
Coinbase went public in April through a direct listing. The stock has dropped 40% since its debut, trading at $229.40 on Monday. Its moves often mirror the volatility of bitcoin, which is down 28% over the same stretch.