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December 23, 2019, 02:09:07 PM
Last edit: February 05, 2020, 11:18:09 AM by Thesaurum___Offical |
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Another major innovation being made by crypto companies is the removal of exchange fees, which have been roundly criticized as too high. Traditional banks are also famous for hitting users with costly fees. According to a recent MyBankTracker study, the average checking account fee per month at leading US banks is $9.60.
On Jan. 28 digital money platform Uphold introduced zero-commission trading on 30 cryptocurrencies, but only on through iOS and Android mobile apps.
According to Uphold CEO J.P. Thieriot, removing fees will ensure affordable access to cryptocurrency for millions of retail investors. He told Cointelegraph:
“Cryptocurrencies were one of the more expensive asset classes for retail investors to trade, with fees north of 200 basis points on some mainstream platforms. The goal here is to create something useful for people around the world and in everyday context, while differentiating us from our competitors. Ultimately, the internet of money is likely to evolve in ways that banks haven’t been able to do a good job with.”
Bloomberg also recently reported that zero-fee trading is coming to crypto, just as it has come to traditional exchange-traded funds and to online stock transactions. Global financial technology co-head at ConsenSys Lex Sokolin told Bloomberg:
“Free trading has become a feature of all fintech direct trading offerings, from Robinhood to SoFi and even JPMorgan. So it’s not surprising that in a digital race to acquire the most users, execution prices are starting to collapse.”
Yet without exchange fees, crypto companies will likely be earning smaller amounts of revenue. Thieriot is confident this model will be beneficial overall, though, saying:
“In moving to lower fees, Uphold expects the typical tradeoff between higher volume and lower margin. The good news is that unlike incumbent banks and brokerages, our cost structure is a fraction of theirs. We are crypto-native and technology-led, which imbues important structural advantages.”
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