JPMorgan, Coinbase Partnership ‘Removes the Need for the Middleman’

The largest bank in the United States has teamed up with the country’s top centralized crypto exchange (CEX) in a multi-part strategic partnership. JPMorgan Chase, with $4.3 trillion in assets, and Coinbase announced on Wednesday a new partnership to offer more than 80 million Chase customers a new, more streamlined way to access crypto via Coinbase.

The deal centers around three new features: a “direct bank-to-wallet connection” through JPMorgan’s API, the ability to use Chase credit cards to buy crypto on Coinbase, and the option to convert Chase Ultimate Rewards points into USDC, the second-largest U.S. dollar-pegged stablecoin, according to a press release. Both the bank-exchange link and the credit card rewards conversion features are expected to go live next year, while Coinbase customers should be able to use their Chase credit card to fund their account on the exchange as soon as this fall.

With the bank-exchange connection, Chase customers will be able to move funds directly between their bank account and Coinbase, without using a third-party banking aggregator, namely Plaid, which is the system currently in place for linking banking accounts to the crypto exchange.

“This new direct connection with Coinbase removes the need for the middleman,” a spokesperson for JPMorgan told The Defiant in an email. In explaining how the direct link will benefit Coinbase users directly, the JPMorgan spokesperson pointed to data privacy:

“While our industry-leading, secure, API provides seamless access through the aggregators today, the current ecosystem is over-using that data access in a concerning way.”

The spokesperson added that today’s announcement about a direct connection with Coinbase is a step toward “improving that ecosystem and fostering innovation our customers will benefit from.”

Meanwhile, the credit card rewards feature will let users turn 100 points into $1 worth of USDC, marking the first time a major bank’s loyalty program can be used this way, according to a blog post from Coinbase.

“This partnership marks a significant step forward in empowering our customers to take control of their financial futures,” said Melissa Feldsher, Head of Payments and Lending Innovation for JPMorgan, per the release:

“By joining forces with Coinbase, we are enhancing the security and privacy of our customers’ data, allowing them to use their money and rewards in new and exciting ways.”

The deal between JPMorgan and Coinbase underscores the growing integration between traditional finance (TradFi) firms and digital asset platforms, as crypto continues to gain mainstream traction. It also marks yet another example of JPMorgan’s active involvement in the crypto space, despite CEO Jamie Dimon’s historically negative stance on the asset class.

Following the announcement, Coinbase stock rose nearly 3% on the day to $381, while JPMorgan shares ticked up nearly 1% to $299.

This is Coinbase’s second partnership with a major U.S. bank this month. Last week, PNC announced that it will offer clients access to crypto via Coinbase, while also offering select banking services to the CEX.

The news comes a little over a month after the U.S. bank revealed it is testing a dollar-pegged “deposit token” called JPMD on Base, Coinbase’s Ethereum Layer 2 network.

The Defiant reported then that the token represents dollar deposits and is part of the bank’s broader push into digital assets. The pilot also followed JPMorgan’s recent trademark filing for digital asset-related services.