Banking giant Barclays has cut its banking ties with Coinbase in the United Kingdom, according to a report by Coindesk.
This is impacting the UK-based clients of the crypto exchange as it has lost its access to the UK Faster Payments Scheme (FPS), which enables instant deposits and transfers of the British pound. As a result, fiat deposits or withdrawals from the exchange for Coinbase UK customers are taking days to process.
Though the exact reason behind this end of ties is known yet, many industry experts are speculating many possibilities 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,” an anonymous source of the publication said.
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Another speculation pointed out that the bank got uncomfortable with the US-based exchange’s push to add more crypto on its platform for trading.
Coinbase opened an account with Barclays in early 2018 which boosted the exchange business in the United Kingdom. It also obtained an e-money license by the UK’s Financial Conduct Authority (FCA) and, being on the network of the British banking giant, became the first crypto company to get access to FPS.
Restoring the lost services
The report also revealed that the San Francisco-headquartered exchange has already tied with ClearBank to serve its UK-based customers. Though at this point, the exchange lost its FPS access, the new banking partner is expected to restore Coinbase’s access to the network by the end of the third quarter.
Similar to banking access, another crucial sector hostile with crypto companies are insurance companies. Though Coinbase insured its hot wallets for up to $255 million, the exchange is also planning to set up a captive insurance subsidiary to get access to the reinsurance market.