The Charles Schwab Corp. SCHW has been planning to introduce spot cryptocurrency trading once the U.S. regulations related to these assets ease, which is likely to occur once President-elect Donald Trump takes office. This was stated by the incoming CEO Rick Wurster in an interview with Bloomberg.
Rationale Behind Schwab’s Move
Wurster, who will step into the new role on Jan. 1, 2025, mentioned that Schwab’s clients have already shown interest and actively participated in the cryptocurrency space via investment vehicles such as exchange-traded funds , futures and closed-end funds, and have earned decent returns.
Now, SCHW aims to move further by directly offering cryptocurrency trading. He stated, “We’ve been waiting on a change in the regulatory environment … and we’re confident that we think that will come in short order.”
“Crypto has certainly caught many’s attention, and they’ve made a lot of money doing it,” Wurster added.
Further, Wurster shared that artificial intelligence will likely impact wealth-management business significantly. “It used to be that 60,000 times a month, we would have a phone rep spend more than three minutes searching for a piece of information to answer a client question. Now we have built an AI capability that finds that information in seconds,” he stated.
Schwab has been in the crypto space for a long time while facing competition from State Street Corp. STT and Robinhood Markets, Inc. HOOD. This August, STT entered into a strategic partnership with Taurus SA to enhance its digital solutions including crypto service. HOOD added four cryptocurrencies to its crypto platform earlier this month, bringing the total number of cryptocurrencies to 19.
Thus, by introducing crypto trading, Schwab will enter a profitable market that has seen growing demand from clients.
SCHW’s Zacks Rank & Price Performance
In the past six months, SCHW shares have gained 11.7%, underperforming the industry’s 22.7% growth.
Image Source: Zacks Investment Research
Currently, Schwab carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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