Crypto Exchanges Enter US Stock Trading: High Compliance Costs, Low Commissions, Traditional Brokers Shift to Asset Custody

Amid the ongoing crypto bear market, major exchanges such as Binance and Coinbase are expanding into US stock trading, aiming to transform into comprehensive financial platforms. However, they face significant hurdles: high compliance costs, razor-thin stock trading commissions, and difficulty attracting new users away from established brokers. In contrast, traditional brokers like Charles Schwab, Interactive Brokers, and Robinhood have already shifted their profit model away from trade execution fees toward asset custody and interest income. The industry's competitive focus has moved from trading volume to asset retention. Crypto exchanges lack the licensing, user base, and risk management infrastructure that incumbents possess, making their entry into the US stock market a challenging endeavor.