Coinbase of San Francisco has opened an account at Barclay’s Bank of London, according to the Financial Times.
This is noteworthy because it is the first time that a digital exchange has opened a bank account with a major British bank. Moreover, the sheer size of the two entities means that the move is likely to be a significant one for the industry.
Barclays Bank, market capitalisation 35.52 billion USD, has more than 1400 branches and 40,000 employees in the UK. It is breaking ranks somewhat with this move; Lloyds does not accept credit card transactions used to purchase cryptocurrency, and the Royal Bank of Scotland stopped business with Gibraltar International Bank shortly after ICOs were legalised in the latter’s home base, to give just two recent examples of the British banking establishment/cryptocurrency relationship.
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Coinbase owns the exchange GDAX, which processes almost 270 billion USD in cryptocurrency trading according to coinmarketcap.com, making it the 7th most-used in the world. On its website it claims to have more than 10 million users.
Previously, British customers of Coinbase had to go through an Estonian bank, LHV. The partnership between the Coinbase and LHV dates back to 2014. The withdrawal/deposit process for UK residents had been fairly convoluted, involving conversion to euro and a SEPA transfer, and could take up to three days. The exchange decided to open an account at Barclays to make the process more simple for its UK customers. It did this because the EU is the fastest-growing market among those that the exchange serves, and the UK has the exchange’s biggest customer base within that market, according to TechCrunch. It is currently actively hiring staff for its UK offices.
In tandem with its new bank account, Coinbase announced two other developments. First, it has received an e-money licence from the FCA, which allows it to operate in the UK and 23 other countries of the EU.
Second, it has added support for the Faster Payments Service, which is (as the name suggests) an initiative to develop technology to speed up payment processing. It is supported by most major banks in the UK, including Santander UK, Barclays, Citi, HSBC, Lloyds TSB, and Royal Bank of Scotland Group. Coinbase will be the first cryptocurrency exchange to participate in the intitiative.