Binance.US has agreed to stop paying any spot trading fees in some well-known cryptocurrencies. The main exchange’s US office has opted not to impose any fees for spot trades of bitcoin to US dollars and the three most popular stable currencies, tether, usdc, and binance usd.
In reaction, shares of Coinbase are presently down up to 5%, while Robinhood’s shares are also declining.
US CEO Brian Shroder, who spoke to Bloomberg, thinks this announcement will increase user interest and foster a great user experience.
The spot and general trading costs in the US are already modest. Due to its industry-low costs, Forbes Advisor named Binance.US the top cryptocurrency exchange in the US.
Binance.US has stated that it would not profit from cryptocurrency trading with no costs. Additionally, providing commission-free crypto trading, Robinhood requires users to pay the spread. Additionally, Robinhood earns a sizable profit by receiving rebates from market makers, in contrast to Binance.US, which does not profit from free crypto trading.
Instead of sending customer orders to large exchanges, Robinhood uses a mechanism called “payment for order flow” to send them to partner market maker companies, who then pay Robinhood a rebate. Gary Gensler, the Security and Exchanges Commission chairman, harshly condemned this tactic as having a significant conflict of interest.
Coinbase’s fees for cryptocurrency transactions vary from 1% for Coinbase Wallet exchanges to 4% for credit/debit card purchases. As a result, it boasts some of the highest fees of any cryptocurrency exchange. Alesia Haas, the CFO of Coinbase, stated that the company’s costs are clear and that it does not get payment from order flow like Robinhood.