Barclays, a leading London-based international bank has severed its ties with Coinbase crypto exchange in the UK. A report unveiled this news on August 14. This move has put an end to the most prestigious banking relationship in the crypto space. Reportedly, this change has inconvenienced a lot of the exchange’s users.
According to the report, Coinbase lost access to the Fast Payments System (FPS). This service was important for the exchange as it facilitated instant deposits and transfers of GBP. As a result of this bearish step, fiat deposits and withdrawals from the exchange to its UK-based clients are taking several days to process. Per people familiar with the matter, Coinbase has already found a replacement dubbed “ClearBank”.
Reason of Barclays’ Decision to Cut Ties with Coinbase Remains Unknown
While the exact reason for cutting ties with Barclays remains unknown, several industry experts have come up with different possibilities.
In the report, an anonymous expert claimed that the relationship between the two parties was a pilot program. The expert believes that this news means the trial had completed its test period. This source added that Barclays might have prevented Coinbase from listing potential coins.
A CEO of a UK-based crypto firm that chose to remain anonymous noted,
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,
No Free Passes
While ClearBank has offered Coinbase its service, this does not mean that Coinbase got a free pass. Earlier this week a publication unveiled that the exchange intends to delist Z Cash from its platform. According to the report, the exchange noted that all Z Cash (ZEC) wallets would not be available for its UK clients starting August 26. An anonymous source familiar with the matter said that this move came after the new bank refused to support the coin. This because ZEC’s privacy feature would make enforcing law a difficult job.
Although losing Barclays’s support has caused problems for Coinbase, the exchange still has another banking partner. Coinbase has been partners with Estonia-based LVH bank for years. While LVH is working to offer access to Faster Payments in the UK, industry sources believe that the bank is a long way from achieving this feat.
This news comes after Coinbase detailed how it managed to stop a sophisticated phishing attack. According to the exchange, attackers use valid Cambridge domains to send a URL containing malware to some of its employees. Coinbase detailed that when opened through Firefox, the URL installed malware that could take over a computer. However, the exchange notes that its security team noticed this attempt before it was too late and acted accordingly to stop it.
Do you think the end of Barclays’ and Coinbase’s banking relationship will impact the crypto market negatively? Let us know in the comments below.