JPMorgan Chase and Coinbase have signed an agreement creating direct connections between Chase bank accounts and cryptocurrency wallets, eliminating intermediary data services.
The partnership arrives as America’s largest bank implements new fees for fintech companies accessing customer information.
The bank-to-wallet integration will launch next year and provides Chase customers seamless access to their Coinbase accounts without third-party data aggregators.
This direct relationship could reduce costs and improve user experience while avoiding the data access charges JPMorgan recently introduced.
Credit Card Integration Expands Crypto Access Options
Chase customers can finally use their credit cards to fund Coinbase accounts, and the feature will probably switch on sometime this fall.
The alliance also enables redemption of Chase rewards points into crypto wallets, which integrates conventional banking rewards into digital asset investing.
These new funding sources can drive cryptocurrency adoption by Chase’s customer base by streamlining the onboarding process. Credit card integration offers instant funding capability over legacy bank transfer lags.
JPMorgan’s move to charge fintech companies for customer data access has sparked industry criticism, with crypto executives like Tyler Winklevoss publicly opposing the fees.
Winklevoss accused the bank of pausing his exchange Gemini’s customer onboarding due to his criticism.
Data Aggregator Relationships Continue Despite Direct Connection
According to Bloomberg, Coinbase has confirmed it will maintain existing partnerships with data aggregators like Plaid, MX Technologies, and Akoya alongside the new JPMorgan connection.
This option maintains access to the remaining financial institutions with the additional advantage of direct Chase integration.
Direct relationship with the bank is size and negotiating power dependent, hence universal adoption is not guaranteed. Small fintech companies may lack resources to establish single relationships with multiple banks.
The deal is done during a period of regulatory uncertainty since the Consumer Financial Protection Bureau is updating personal financial information rights rules.
A federal court judge granted CFPB’s request to delay litigation against Biden-era regulations prohibiting banks from charging data access fees.
This regulatory freeze leaves banks space to implement fee models while fintech companies seek alternative methods of access.
Coinbase has also begun preliminary discussions with PNC Financial Services Group to enable cryptocurrency trading via wealth and asset management accounts.
