One of the largest British banks, Barclays, has cut their relation with cryptocurrency exchange Coinbase, anonymous sources told crypto news outlet CoinDesk on August 13.
The relationship between the bank and the cryptocurrency exchange first began in March 2018, when Coinbase opened a Barclays account. This gave the exchange access to the United Kingdom’s Faster Payments Scheme (FPS), which enabled its U.K. users to instantly deposit and withdraw British pounds from the exchange. This breakup will explain the announcement Coinbase made in late July on their blog, which stated that:
“Over the next few weeks, Coinbase.com customers based in the UK may experience some inconvenience while we transition our payments systems. Starting on July 31 at 12:01am BST, we will temporarily remove Faster Payments Scheme (FPS) support for domestic GBP deposits and withdrawals.”
Though the reason for the breakup is still unknown, an unnamed CEO of a U.K. crypto company told CoinDesk:
“It is my understanding that Barclays’ risk appetite has contracted a little – I’m not sure exactly why or what’s been driving that, maybe there has been some activity they are not happy with. But it’s about Barclays’ comfort level with crypto as a whole.”
With the loss of the Faster Payments Scheme, deposits and withdrawals for U.K. customer can now take days, which is the reason Coinbase provided reduced trading fees for their U.K. customers between August 1st and August 15th. But this situation is only temporary, according to the unnamed sources, which told CoinDesk that the exchange found a replacement in ClearBank, a much younger and less established bank. The sources also said that Coinbase is expected to restore its access to FPS by the end of this year’s third quarter.
It also seems that the new partnership was responsible for some changes that Coinbase made this month. The exchange sent emails, which were made public via Twitter, to its U.K. customer informing them that Zcash will be de-listed, and according to Coindesk’s sources, this move had everything “to do with the new bank”. Apparently ClearBank was uncomfortable with indirectly supporting cryptocurrency which made law enforcement’s job harder.
We still have to wait and see how this news will affect the cryptocurrency exchange, but according to data provided by cryptocurrency investor and entrepreneur Alistair Milne, Coinbase has seen eight million new user registrations in the past year.