Barclays cuts ties with US-based crypto exchange

Barclays cuts ties with US-based crypto exchange

Barclays is not providing banking services to major cryptocurrency exchange Coinbase, sources familiar with the matter told Reuters. This is the end of a relationship that started in March last year as the exchange expanded in Europe.

The rare deal between the San Francisco-based exchange and the British bank helped Coinbase users to buy cryptocurrencies with pounds and withdraw their funds.

Barclays refused to comment, so did Coinbase to repeated requests for comment. The news was first reported by industry website CoinDesk on Wednesday.

Large global banks have been hesitant to do business with companies that handle bitcoin and other digital coins because of concerns that these cryptocurrencies are being used by criminals to conceal the origin of money and that regulators will soon catch them.

Three-quarters of cryptocurrency businesses in Britain are bound to bank overseas due to the difficulty of getting banking services onshore, a survey by industry body CryptoUK reported last month.

Even crypto-related firms that don’t handle digital coins, such as web designers, have problems in opening bank accounts, CryptoUK chair Iqbal Gandham told Reuters. The association itself could not get an account with a major UK bank, he said.

These lead to extra operational costs and often force British firms to seek accounts overseas, Iqbal said, adding that the industry was not sure on what steps it needed to take to get easier access to banking.

Coinbase’s chief executive for the UK, which is its biggest European market, said in March 2018 that the deal with Barclays had taken some time to sign because the bank needed to be sure that Coinbase had the right systems in place to prevent money laundering.

Cryptocurrencies are largely unregulated in Britain and across Europe, but Coinbase is licenced to provide fiat currency-related services across 23 European Union countries. Many customers deposit fiat money – currency that a government has declared to be legal tender – at Coinbase before buying and selling cryptocurrencies.

While big banks remain reluctant to become too closely involved in testing the global crypto market, large companies and venture capital funds are putting money in, Reuters reported in April.


mm

Jeff Blakely

Jeff is by far, the most serious one on the team, but in his lighter moments, can bring the house down with laughter! He is a student of business and has worked freelance with every eminent business house with a name on Wall Street! His analytical and logical skills aid him in decrypting the most tedious statements from companies, and his writer’s enigma helps him turn it into intellectual sounding, yet informative articles for Voxnewz!

Leave a Reply

Your email address will not be published. Required fields are marked *

Close