Coinbase has been granted an FCA e-money licence in the UK and has struck a deal with Barclays for banking services.
In a blog update, digital wallet and crypto exchange provider, Coinbase, has announced two major developments as the firm looks to increase its foothold in the UK, and Europe as a whole.
CEO Zeeshan Feroz firstly announced that the company had been granted an e-money licence by the Financial Conduct Authority, and secondly was that it will now support the UK Faster Payments System.
The first development means that Coinbase will be able to issue e-money and provide payment services within the UK. It also serves as proof that the exchange has met the conditions for security and operational standards demanded by all such services in the UK market. Under current EU ‘passporting’ regulations, that licence will extend it the same privileges across all 23 member countries as it does in the UK – going a long way to opening up the market as a whole for the firm, and its GDAX exchange.
Interestingly, it comes despite ongoing investigations into Coinbase staff for alleged insider trading, and the ongoing threat of a class action lawsuit against the San Francisco-based company in the US.
Its joining of the Faster Payments Scheme will allow UK customers to benefit from faster bank transfers when moving money to and from GB pounds. The protocol will replace the Single Euro Payments Area (SEPA) initiative under which it operated previously, and which could lead to up to five-day waits for payments to process via the firm’s Estonian operation when trading volume was heavy. Now, withdrawals of assets into GB pounds will be almost instantaneous.
The Financial Times has reported that Coinbase’s UK banking will be handled by Barclays, though the bank refused to provide comment on the matter – and this was not mentioned specifically in Feroz’s post. Whichever company is providing the Coinbase with its banking facility, it breaks new ground – as it will be the first such partnership between a British bank and a cryptocurrency service. Indeed, British banks have been seen as actively shutting out exchanges from banking facilities in the UK market.
To conclude his post, Feroz also commented that the EU market grew twice as fast as any other for the firm in 2017, with the UK being the largest market within the current EU block. He also reported that Coinbase planned to increase its team in London by 8x in the coming year.
It would appear that courting FCA approval, and thus helping to open up access to British and EU banking services, is all part of the firm’s plans to court even more European business and make the process of dealing in cryptocurrency much more consumer-friendly. It also serves to get out in-front of any UK regulatory moves that may come after the Westminster cross-party Treasury Select Committee finishes its inquiry into the cryptocurrency market.