Barclays has ended its relationship with Coinbase UK after having offered banking support to the cryptocurrency exchange for over a year. The reason for this is not yet clear and the cryptocurrency exchange has turned to the U.K. upstart ClearBank for banking support.
The end of Barclays and Coinbase
Coinbase and Barclays had first forged their alliance in early 2018 when the exchange had received an E-money license from UK’s regulatory body, Financial Conduct Authority (FCA). Owing to its association with Barclays, the US-based exchange had access to the U.K. Faster Payments Scheme (FPS) that enabled instantaneous deposits and withdrawals of British pounds at the exchange.
The end of this relationship with Barclays will cost the exchange in terms of inconveniencing its customers with time-consuming British pound deposit and withdrawals. Coinbase had also published a blog updating its customers regarding the removal of FPS from Coinbase UK. In the blog published on June 24 –
“Over the next few weeks, Coinbase.com customers based in the UK may experience some inconvenience while we transition our payments systems.”
The exchange is also offering discounts on its trading fees for impacted customers between August 1st and August 15th as compensation for the inconvenience.
The reason for the end of this relationship is not yet clear, but people are attributing it to a change in Barclays’ stance towards cryptocurrencies. According to the CEO of a U.K. crypto company who refuses to be named, “Barclays’ risk appetite has contracted a little.”
This revelation comes a few days after the UK’s Tax Authority Her Majesty’s Revenue & Customs (HMRC) ordered crypto exchanges to submit information about customers’ names and transactions to identify individuals who evade taxes.
ZCash Delisted Because of the New Partnership
The exchange has partnered with U.K. upstart ClearBank for facilitating British pound transactions on the exchange. However, that too has come at a cost for the exchange. It delisted privacy coin Zcash from its platforms, and reportedly, this decision has to do with the partnership with ClearBank. The young bank’s discomfort at getting associated with a platform that supports a privacy-focused tool of transaction in a tightening regulatory environment is understandable.
Coinbase is expected to regain FPS access by the end of the third quarter, but till then, customers will have to put up with with long processing times for British pound-based transactions on the exchange.