JPMorgan, Coinbase partner to directly link bank accounts, crypto wallets

WEB DESK: JPMorgan Chase & Co. and Coinbase Global Inc. signed an agreement to directly link customers’ bank accounts to their cryptocurrency wallets, as banks and fintechs clash over who has access to consumer data and at what cost.

The connections between Chase bank accounts and Coinbase crypto wallets are expected to go live next year, according to a statement Wednesday.

By establishing this type of direct relationship with a bank, financial-technology companies could cut out data aggregators such as Plaid Inc., MX Technologies Inc. or Akoya, which have traditionally served as behind-the-scenes connectors between the companies and banks.

Coinbase plans to maintain all its existing relationships with data aggregators, with direct connections to Chase accounts in addition to those, a Coinbase spokesperson said.

JPMorgan, the largest US bank recently began informing fintechs that it would charge them each time a customer’s information was accessed. The move sparked an outcry among executives at fintech and cryptocurrency companies, including crypto billionaire Tyler Winklevoss, who publicly decried the move.

Winklevoss then accused JPMorgan of pausing the onboarding of his crypto exchange Gemini as a customer because of his criticism of the bank.

While one-time-tie-ups could cut costs, it’s unclear whether it’s feasible for all companies – regardless of size – to negotiate deals to forgo relationships with data aggregators altogether. In a written statement, a JPMorgan spokesperson said the bank is open to establishing direct connections and has a “team actively working to do that.”

IF other fintech opt to pursue that path, they would need to establish direct relationships with all the banks their customers want to connect with, which data aggregators typically do through data-sharing agreements.

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Funding Accounts

In addition to linking bank accounts, customers will be able to fund Coinbase accounts with their Chase credit cards for the first time – an option expected to be active this fall, the firms said in a statement. They will also be able to redeem Chase rewards points to fund their crypto wallets.

The deal comes during a moment of regulatory uncertainty, as the US Consumer Financial Protection Bureau retools a rule governing personal financial data rights. A federal judge on Tuesday approved the CFPB’s request to stay litigation over a rule finalised during the Biden administration that prevented banks from charging fees for access to customer data.

Coinbase also has an early-stage agreement with PNC Financial Services Group Inc. exploring how to allow wealth and asset management clients to trade cryptocurrency using their PNC accounts.