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Coinbase’s partnership with Barclays allowed British clients to use Coinbase extensively. The end of this partnership could also potentially end Coinbase users’ access to the UK “Faster Payments Scheme” (FPS).
Now, London-based Barclays seems to have decided that they will stop working with crypto exchange Coinbase. This may not seem like a huge problem at first because Coinbase has already started working with U.K. upstart ClearBank. However, for company’s users – this might be pretty unsatisfactory.
At one side there is a prestige of working with a famous banking brand that was connecting San Francisco-based exchange with the U.K.
On the other side, there is a Faster Payments Scheme (FPS), that makes instant withdrawing and depositing of the British pounds at the exchange possible. Now, Coinbase’s access to FPS is interrupted meaning that the deposits and withdrawals in GBP for U.K. clients are much slower, and it takes them a few days to be processed.
However, from the exchange, they are hoping that the situation is not permanent. ClearBank is considered to be one of the U.K. “challenger banks” that came up in recent years in order to compete with market holders. It is expected that the bank will re-establish Coinbase’s FPS access by the end of the Q3.
Nowadays, crypto firms are experiencing a hard time getting banks as partners because big banks are not really eager to enter this sector.
That is why Coinbases’s deal with Barclays was a big deal. Let’s not forget that Coinbase almost instantly got an e-money license issued by U.K. Financial Conduct Authority (FCA) and was the first crypto firm to get their hands on FPS.
Whether Barclays got scared about their crypto-clients is still not known. It is sure that now, the clients are questioning their trust in the exchange.
One of the crypto CEOs said that he understood that Barclays’ risk appetite has decreased. Other have said that the Coinbase-Barclays relationship was just a pilot program that has “simply run its course”.
However, it seems ClearBank has its opinion as well. A few days ago, for still unknown reasons, Coinbase decided to de-list Zcash for U.K. customers. Some individuals familiar with this decision say de-listing of this privacy-centric crypto was 100% conditioned by the ClearBank.
But Coinbase is not the only one. Back in 2016, Barclays was all about co-working with Circle Internet Financial, that then was famous for their Circle Pay, an FCA-regulated app that used Bitcoin to help make no-fee currency transfers easier. Barclays used to hold customers’ deposits.
Barclays then said that they are supporting the exploration of positive uses of blockchain that can benefit consumers and society. However, today the status of their partnership is not really known.
When it was cooperating with Barclays, Coinbase had a banking relationship with Estonia-based LHV Bank for some years. LHV has been working to ensure access to Faster Payments in the U.K. but, according to industry sources, this “might still be a ways off”.
A spokeswoman for LHV confirmed that they technically did join the Faster Payments scheme, but that there are still some legal issues to work on.
ClearBank also collaborates with U.K. FCA-regulated crypto broker BCB Group who, a while ago, announced they are bringing Luxembourg-based exchange BitStamp onto Faster Payments for GBP.
“All our clients’ GBP funds clear within 60 seconds both ways via FPS; Bitstamp is likely to be set up internally to pass that benefit on to their GBP customers (by processing payment information as fast as they receive it),” shared BCB’s founder and CEO Oliver von Landsberg-Sadie.