Barclays ends Coinbase banking relationship that began in March 2018, losing its access to the FPS for fiat settlements.
August 14, 2019 | AtoZ Markets - U.K.-based banking giant Barclays has severed its banking ties with U.S.Based cryptocurrency exchange Coinbase. CoinDesk reported the news yesterday August 13, citing anonymous industry sources.
The news apparently affected Coinbase’s users access to the United Kingdom’s Faster Payments Scheme (FPS), which allows them to instantly deposit and transfer the British pound at the exchange. As a result, fiat deposits or withdrawals from the exchange are taking days to process for Coinbase UK clients.
This current situation is, however, temporary as the report added that Coinbase has now found a new banking partner ClearBank, a newly established financial institution, which is expected to bring back the FPS access by the end of the third quarter.
Why Barclays ended Coinbase banking relationship?
While the exact reason for Barclay severing Coinbase banking relationship remains unknown, some unnamed sources have speculated the reasons for this:
“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.”
Another speculation pointed out that the Barclay got uncomfortable with Coinbase's request to add more cryptocurrencies on its platform for trading. Currently, traders can trade some of the top-rated crypto assets on Coinbase exchange including:
- Ethereum (ETH)
- Ripple (XRP)
- Bitcoin Cash (BCH)
- Ethereum Classic (ETC)
- Litecoin (LTC)
- USD Coin (USDC)
- And a few others
It is worthy of note, however, that the San Francisco-headquartered exchange has earlier this week stopped offering support for privacy cryptocurrency Zcash (ZEC) for its U.K.-based clients, and this has to do with the new partner bank.
Last week, AtoZMarkets reported that US District Judge Vince Chhabria issued a verdict that the crypto exchange would be charged with negligence, fraud, and unfair competition regarding the process in which Bitcoin Cash was launched
In all of these, Coinbase, having Brian Armstrong as its CEO, seems not to have suffered any setbacks in recent months. This August, it was revealed that the crypto exchange had registered 8 million new users in 2018.
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