Barclays End Partnership with Coinbase

On August, 14^th it was announced that Barclays Bank will no longer be providing banking services to Coinbase, a major cryptocurrency exchange. According to Reuters’ close sources, this move will bring to an end their association that started in March 2018, as the exchange grew across Europe.

The partnership between the British bank and the San-Francisco-based exchange had made it effortless for Coinbase users to withdraw their money and to buy cryptocurrencies using the pound.

Banking and Cryptocurrency

Most global large banks are hesitant to partner and do business with companies that use bitcoin and other digital currencies. This is as a result of the growing concern that criminals use such digital currencies, and that regulators will soon stop them.

In Britain, almost three-quarters of cryptocurrency businesses end up having to use oversea banks because it is hard to get banking services done onshore, a survey reported last month by industry body, CryptoUK.

CryptoUK chair, Iqbal Gandham, told Reuters that even crypto-related firms that don’t handle digital coins, such as web designers, most often face difficulties when opening bank accounts. He added that even the association could not get a banking account with a major UK bank.

As a result, this leads to extra operational costs, which more often leads to most British businesses to look for accounts overseas.

The Riskiness of Cryptocurrencies

The UK chief executive for Coinbase said that in March 2018, the agreement with Barclays had taken some time to sign. They needed the extra time to ensure that Coinbase had the right systems, to avert money laundering.

Cryptocurrencies are still widely unregulated in Britain and across Europe. However, Coinbase is licensed to provide fiat currency-related services within 23 EU countries. Most customers will deposit fiat money at Coinbase before they buy and sell cryptocurrencies.

Despite large banks still being reluctant to become involved in handling cryptocurrency and working with the global cryptocurrency market, there are still large companies and capital funds that attract new investors, Reuters reported in April.

Just recently, Coinbase UK has ceased support for the privacy coin Zcash without any prior announcements.