Coinbase announced that starting February 5, 2024, it will charge a USDC to USD conversion fee on transfers exceeding $75 million per month.
The fee structure will be tiered, meaning the amount converted will determine the applicable fee.
This update aims to provide transparency and ensure a fair pricing model for Coinbase users.
Coinbase's gradation of amounts and fees:
- For transfers up to $75 million, there is no fee.
- Transfers between $75 million and $150 million will be charged a 0.1% fee.
- Transfers between $150 million and $500 million will be charged a 0.15% fee.
- For transfers over $500 million, a 0.2% fee will be charged.
It is important to note that the fee will only be charged on the amount that exceeds the $75 million limit in a rolling 30-day period. This is the so-called "net conversion", which is calculated by subtracting the total USD to USDC transfers from the amount of USDC to USD exchange transactions for the month.
To illustrate this, let's look at an example. Customer A exchanged 100 million USD into USDC and then converted 300 million USDC into USD during the same month. The amount of the "net conversion" would be USD200 million.
Based on this example, the commission calculation would be as follows:
- No fee is charged for the first $75 million USDC.
- For the next $75 million, a 0.1% fee is charged.
- For the remaining $50 million, a fee of 0.15% is charged.
However, it is worth noting that some customers will be exempt from these fees. These include customers with an average USDC balance in excess of $100 million for the month and USDC holders of more than $500 million. In addition, participants in the exchange's Tier 1 and Tier 2 "liquidity program" are also exempt from these fees.
It's worth noting that JPMorgan Chase recently downgraded #Coinbase stock to "neutral."
