The agreement between Coinbase and JPMorgan Chase allows Chase customers to convert Ultimate Rewards points into the stablecoin USDC.
Coinbase has just announced a strategic partnership with JPMorgan Chase to simplify the onboarding process to the leading crypto platform for customers of the largest bank in the United States. Accordingly, customers using Chase services can easily open a Coinbase account through their existing credit card or bank account, while also converting 'Chase Ultimate Rewards' points into the stablecoin USDC.
However, it should be clarified that this partnership does not mean Chase has directly provided crypto to customers. The agreement simply helps lower the barriers to entry for Chase customers who want to participate in the digital asset market through the Coinbase platform. Support for Chase cards in the onboarding process will be implemented by the end of this year, while the functionality to convert rewards points into USDC is expected to launch by the end of 2026.
This move expands the partnership that was announced six weeks earlier between the two parties. Specifically, JPMorgan's Kinexys division is testing the issuance of the JPMD deposit token on the public blockchain network Base developed by Coinbase, aimed at providing services for JPMorgan's customers as well as financial service partners.
The paradox in the fee and rewards system
The feature of converting rewards points into stablecoins reflects a notable paradox in the current financial system. Although stablecoins have not yet been widely adopted in retail, major retailers like Amazon and Walmart are actively researching implementation to avoid high fees from credit card transactions. These fees are primarily collected by banks, which then return a large portion to customers in the form of rewards programs.
If stablecoins are widely accepted in the retail sector, consumers converting Chase rewards points into USDC today may inadvertently undermine the very fee structure that generates rewards in the future. This creates an interesting economic loop: the adoption of blockchain technology to optimize transaction costs could gradually erode the traditional business model based on transaction fees.
The collaboration between Coinbase and JPMorgan Chase reflects the deepening trend of integration between traditional finance and digital assets. Although JPMorgan has previously been cautious about crypto, the bank announced plans in May to allow customers to buy crypto and include these holdings in their bank account statements. This indicates a significant shift in the strategies of large financial institutions towards digital assets.
