Barclays no longer will provide banking services to Coinbase and that is affecting UK clients of the crypto exchange as it has lost access to the UK’s Faster Payments Scheme (FPS), which allows instant deposits and transfers in British pounds.
As a result deposits and withdraws in fiat currencies made by UK clients of Coinbase now take days instead of minutes.
The reasons for the divorce between Barclays and Coinbase are not yet known, but an anonymous source quoted by Coindesk says the decision might be connected with a process of risk reassessment initiated by the bank.
“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,” the source is quoted to have said.
Another possible explanation is that Barclays disagreed with the efforts of the US based crypto exchange to broaden its crypto portfolio by adding more crypto coins to its platform.
Coinbase started working with Barclays back in 2018 and that helped the crypto exchange to extend its presence on the UK market, by making it easier for customers to buy crypto currencies with pounds and withdraw their funds.
Large banks seem reluctant to partner with crypto exchanges, because they fear crypto currencies are often used by criminals to launder money.
Crypto exchanges remain largely unregulated in Europe, but Coinbase has obtained authorization to provide fiat currency services across most EU countries, including the UK, where it is licensed by the UK’s Financial Conduct Authority (FCA).