After a major break with UK Lenders, popular cryptocurrency exchange, Coinbase, has signed a deal with Barclays, making it the first among UK’s banks to have expressed interest in the exchange.
Coinbase, a San Francisco-based startup that is also among the top ten exchanges by volume, has announced on Tuesday that it will open a bank account with the British Bank.
Until now all UK cryptocurrency traders had their transactions routed through a bank located in Estonia. The Barclay-Coinbase partnership plans on simplifying the procedure of deposits and withdrawals for Coinbase’s UK clients.
As regulators are clamping down on exchanges and their business practices, this deal gives Coinbase the appearance of a legitimate company, as this is the first time any notable exchange has entered a collaboration with a leading world bank. With hundreds of exchanges appearing daily to handle the ever increasing demand in the cryptocurrency market, many of said exchanges activate unregulated. Barclays refused to comment regarding this issue.
Regulatory authorities from all nations are repeatedly warning people about how decentralization is means compromising security and recently this month, the Japanese government terminated the licenses of two crypto exchanges for the same motive.
A majority of the world’s banks shunning all that has to do with cryptocurrencies and denying service to account users that have relations to the crypto sphere. This is mainly due to the belief that it is a way that enables the financing of money laundering and terrorists. Barclays’ alliance will give not only the exchange, but also cryptocurrencies in general a semblance of legitimacy in the UK.
But in spite of this, there are still many global banks which have policies that ban dealing with this area of currencies. This move has been deemed by many as the biggest innovation obstacle in the market right now and many people are aiming to modify these policies as there are just as much legitimate products on the market as there are illegitimate. HSBC has issued a complete ban on doing business with this particular sector of assets.
Coinbase also succeeded in obtaining an e-money license from the Financial Conduct Authority, UK’s market regulators which will allow it to continue its expansion in the European market.