Charles Schwab is preparing to offer crypto to its client investors when the regulatory environment becomes more supportive of cryptocurrency and digital assets. That’s expected given Donald Trump won the U.S. election.
“We will get into spot crypto when the regulatory environment changes, and we do anticipate that it will change, and we’re getting ready for that eventuality,” said Rick Wurster, Schwab’s President and incoming CEO told Bloomberg.
Schwab already offers crypto linked ETFs and futures. It is spot crypto that is still on the drawing board.
How important will crypto be for Schwab?
One of its competitors, Robinhood, has a relatively young client base averaging around 32 years of age. It’s been offering crypto for a while, although in May it received a Wells Notice from the Securities and Exchange Commission (SEC) warning of potential legal steps relating to crypto custody, cryptocurrency listings and platform operations. Ironically, Robinhood’s Chief Legal Officer, Dan Gallagher, was touted as a potential SEC Chair pick in the Trump administration, but he’s not interested.
In the first nine months of the year, over 27% of Robinhood’s transaction-based revenues came from cryptocurrency. In fact, Robinhood’s crypto revenues were 130% more than its income relating to equities trading. The only transaction revenue that was bigger was options, which reached two times crypto revenues. For the record, transaction revenues only account for half of Robinhood’s total. Most of the rest is interest income.
Crypto may not have quite such a big impact on Schwab if its regulated investment advisors (RIA) are anything to go by. Crypto is known to skew towards younger investors. Schwab’s 2023 RIA benchmarking study found that 13% of clients are under 40 years old, 31% are 40–59 years of age, and 56% are 60 and older.
Apart from Schwab’s own current offerings of ETFs and futures, it also has a stake in the institutional exchange EDX Markets, which Citadel Securities founded alongside Fidelity Digital Assets, Schwab, Paradigm, Sequoia Capital and Virtu Financial.
