Coinbase is implementing a new fee structure for large-scale USDC conversions, a move that is drawing sharp criticism from a segment of the crypto community. Effective August 13, the exchange will impose a 0.10% fee on net USDC-to-USD conversions that exceed $5 million within a rolling 30-day period. While the first $5 million will remain free of charge, the new policy is seen by some as a step backward for the industry.
<h2>A Departure from Crypto's Core Principles</h2>
[embed]https://twitter.com/RyanSAdams/status/1953238830976323866[/embed]

Critics of the new fee, including Ryan Sean Adams of the Bankless podcast, argue that it is pushing <a href="https://www.cryptoknowmics.com/news/coinbase-ceo-brian-armstrong-criticizes-uks-crypto-ad-ban/">Coinbase</a> toward the practices of traditional financial institutions. The crypto industry was founded on the promise of frictionless, decentralized services, free from the middlemen and fees common in legacy banking. By introducing a fee for converting a dollar-equivalent <a href="https://www.cryptoknowmics.com/news/tether-surpasses-160-billion-usdt-amidst-looming-u-s-stablecoin-regulation/">stablecoin</a> back to fiat, Coinbase is perceived as violating this fundamental principle. This shift is fueling the "bank trap" narrative, where a major crypto player is adopting the very models the industry was created to disrupt.
<h2>Impact on Large-Scale Users and Trust</h2>
The new fee will primarily affect institutional clients and high-volume "whale" users, who are accustomed to seamless, fee-free conversions of large sums of stablecoins. This change could erode trust among this user base, who may view the new policy as a betrayal of crypto's core promise of financial freedom. The fee change comes at a time when Coinbase is also facing growing user dissatisfaction over issues like account freezes and poor customer service. This confluence of events further challenges the exchange's reputation and its standing as a leader in the crypto-native space.

Coinbase's New USDC Fee Sparks "Bank Trap" Criticism

Coinbase's new USDC fee sparks 'bank trap' criticism for institutional users, as critics argue it violates crypto's core principles.

Coinbase's New USDC Fee Sparks "Bank Trap" Criticism

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