Posted 2 years ago | by Bethany Armstrong
Coinbase users are feeling the sting of inconvenience after Barclays, London-based global bank, is no longer working with the cryptocurrency exchange. ClearBank is replacing Barclays. One of the major inconveniences is that the U.K. Faster Payments Scheme (FPS) allowed users to make transactions (withdraw and deposit British pounds) with Coinbase immediately. Now, the transactions take days to process with slower deposits and withdrawals.
The new relationship between ClearBank and Coinbase hope to make this situation temporary and be back up to running transactions at full speed by the end of the third quarter.
Cryptocurrency Friendly Banks
There is a lot of speculation as to why Barclays chose to end their relationship with Coinbase. There has been speculation that perhaps the risk was too great and Barclays’ level of discomfort towards cryptocurrency was too high. Others speculate that perhaps Barclays was preventing Coinbase from expanding with new assets in cryptocurrency. Coinbase was not the only cryptocurrency company to have worked with Barclays. In 2016, Circle Internet Financial had a strong relationship with Barclays. It is unclear what the current status of relationship is between Circle and Barclays at this point. Barclays is still offering banking operations for Blockchain (a wallet provider). Blockchain won’t confirm if the decision to establish a Barclays account is to add Faster Payment to its new exchange division.
Even with the speculation, Coinbase’s new relationship with ClearBank has not had its limitation. Last week, Coinbase de-listed Zcash and that decision was directly linked back to ClearBank.
In addition to Barclays (and now ClearBank), Coinbase also had a banking relationship with LHV Bank. While LHV is making strides to accept Faster Payments, there is still details that need to be worked out.
ClearBank isn’t stopping with Coinbase as their only cryptocurrency relationship. It was recently announced that FCA-regulated crypto broker BCB Group has established a relationship with ClearBank
Santander Blocking Coinbase Customer Deposits
Reports today surfaced that Santander bank in the UK was also blocking customers from making deposits to Coinbase. A few hours after the story broke, Santander denied that any one legitimate company was getting blocked by its card processors. They said that there may have been extra security checks to ensure deposits, but that was it.
As usual in the financial world, it seems like the bank is not giving the whole story. The blocking of the deposits, however, was sudden as users noticed a marked difference when deposits were suddenly no longer working.
One other interesting bit of information is that it was not all crypto on ramps that were blocked by Santander. Other crypto fiat gateways were working for deposits. It seems odd that around the time Coinbase announced their split with Barclays, all of a sudden deposits from Santander customers were blocked.
Something Strange Going on in the UK with Crypto
Last week it was reported that the tax authority in the UK, HM Revenue & Customs, had been in contact with CEX.io, eToro, & Coinbase regarding customer transactions. It's unclear how cooperative these organizations were with the UK government. But it is weird timing that the tax authority requests story broke this week and now we are seeing the UK banks seemingly crack down on crypto. Let's look at some of the major stories regarding the UK & Crypto that have occurred in the last few weeks:
- Financial Conduct Authority (FCA) says that Bitcoin has no intrinsic value and is risky, but will be impossible to regulate
- HM Revenue & Customs requests info from major exchanges
- Talks of a No Deal Brexit have the UK, the EU, & the rest of the world on edge
- Zcash removed from Coinbase in the UK
- Coinbase relationship with Barclays ended
- Santander customers report the bank is blocking deposits
It's unclear right now what the end result of this will be. Is the UK heading toward a much more bearish opinion on cryptocurrency? This could have a profound effect on the crypto market if it is indeed true. While Bitcoin cannot truly be regulated, the banks & powers that be could certainly make it harder for customers to deposit and withdraw money from the fiat gateways in crypto.