Coinbase, the cryptocurrency exchange, is expanding into traditional financial services. Users can deposit their paychecks directly into their online accounts.
Coinbase announced Monday that U.S. customers will be able use direct deposit for any portion of their paycheck. You can either hold your money in dollars, or transfer it instantly into cryptocurrencies such as bitcoin.
Max Branzburg (Vice President of Product at Coinbase), stated in a blog post that direct deposit allows customers to access crypto-first financial services more easily and is ready for any trades or purchases. "We are determined to provide the most trusted and complete suite of crypto-first services to our 68,000,000 users."
Coinbase will launch the service in the next few weeks. This is after customers complained about frequent transfers from their bank accounts into Coinbase being "time-consuming" and "inconvenient." Coinbase stated that they aim to provide "instant access" to the cryptoeconomy.
Coinbase stated that it will use an FDIC insured bank partner for direct deposits, but didn't specify which one. For its Coinbase rewards card, the company partners with Meta Bank.
Direct deposit is also available on other popular online finance apps. The service is offered by online banking companies such as SoFi and Chime, and also allows users to deposit their paychecks via PayPal or stock-trading platform Robinhood.
Coinbase is constantly expanding its offerings and trying to navigate the complex regulatory environment. After the SEC threatened to sue, Coinbase cancelled plans for a high interest lending product.
Brian Armstrong, CEO of Coinbase, called it "really suspicious behavior" from the SEC. Armstrong claimed that the agency refused to meet the company and offered "zero explanation" as to why.
Gary Gensler, Chairman of the SEC, has intensified his criticisms of the cryptocurrency industry. Gensler, in testimony to the Senate Banking Committee called for greater crypto oversight. Gensler also requested additional resources from Congress in order to protect investors and claimed that all digital assets traded must be registered with the agency.
Coinbase was listed on NASDAQ in April via a direct listing. Since its launch, the stock has fallen 40% and traded at $229.40 Monday. Its movements often mirror bitcoin's volatility, which has fallen 28% in the same time period.
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