With Bitcoin losing more 20 percent over the last few days, the news surrounding Coinbase in Europe seems to be making the situation worse. Santander UK has reportedly ended their relationship with the major US-based crypto exchange, further tightening the noose after Britain’s Barclays announced a similar decision earlier today.
A Reddit user posted the following thread which explains that “U.K. Bank Santander blocks all payments to Coinbase”
Santander UK is a large retail and commercial bank and a wholly-owned subsidiary of the global lender Banco Santander. When leading banks started shifting their activities to the crypto direction, Santander was no exception. Last year, it announced working with Ripple to use its xCurrent product for international payments in various European countries along with the US through its app One Pay FX.
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The crypto markets woke up Wednesday to the news that Coinbase’s banking relationship was under threat in its largest market in Europe. Shortly after, an online report started circulating and suggested that the San Francisco-based exchange found a replacement UK banking partner in ClearBank.
Back to Estonian banks?
The most noticeable hurdle, however, will be losing access Faster Payments which simplifies the process of topping up and withdrawing money from Coinbase.
Coinbase’s UK subsidiary already holds an e-money license by the UK’s FCA, which was a precursor to getting the banking relationship with British banks. Coinbase was also the first crypto exchange to use Britain’s Faster Payments Scheme, a network used by the traditional financial industry. Previously, UK users had to transfer pounds into euros and go through an Estonian bank, which could take a few days.
Britons may become unable to withdraw their money easily back to their bank account. Instead, they would have to go through a long process, converting the money into euros then back into pounds, leaving some users stung with exchange rate charges.
In all cases, the complexity and scale involved mean that it is taking some time to return to normal payment cycles, though Coinbase expects the situation to normalize and restore FPS access by the end of the third quarter.