- Barclays agrees to offer cryptocurrency exchange Coinbase access to UK’s Faster Payments Scheme.
- The deal comes after Coinbase gained approval from the UK’s financial regulator.
- The UK is Coinbase’s biggest market in the EU and is growing fast.
- Coinbase plans to increase staff numbers in London by eight times to meet demand.
LONDON — Barclays has agreed to provide US cryptocurrency exchange Coinbase with access to the UK’s Faster Payments Scheme in a first for the bank and for an exchange in the UK.
Coinbase is gaining access to the Faster Payment Scheme, the core payment infrastructure used by consumers to move money in the UK. Coinbase’s UK head Zeeshan Feroz confirmed to Business Insider that the company was partnering with Barclays on the deal.
“There is no other exchange today that has access to domestic banking,” he said. “UK consumers today have to jump through all sorts of hoops around sending money to European accounts using euros in order to get money in and out.”
Faster Payments will allow Coinbase’s UK customers “to see a vastly improved deposit and withdrawal experience,” Feroz said.
The deal represents the first major partnerships between a UK bank and a cryptocurrency exchange. Many traditional lenders are reluctant to work with cryptocurrencies due to their anonymity and potential for use in laundering money.
Feroz said Barclays “approached it with the right mindset” and closely scrutinized Coinbase’s compliance processes. An e-money license from the UK’s Financial Conduct Authority (FCA), also announced on Tuesday, helped get the deal done.
“It’s an approval of the compliance and the KYC processes we have today,” Feroz said of the FCA license. “There’s an element of trust here in a business that is regulated by the FCA.”
The license doesn’t cover Coinbase’s cryptocurrency activities and Feroz said: “The way to think about it is that’s all the fiat money that we handle: money in, money out.”
The UK is Coinbase’s biggest market in Europe and is twice as large as the next biggest, Feroz said. He declined to name the second largest country.
Europe grew twice as fast as any other market globally last year and the UK “was driving a lot of that,” Feroz said. Bitcoin rose over 1,500% against the dollar in 2017 and its incredible rise helped spark a wave of interest in cryptocurrencies globally.
‘The UK is a huge market for us, Brexit or no Brexit’
Coinbase will initially trial its Faster Payments services with institutional clients before rolling out to consumers. Feroz said the majority of clients in the UK are retail but described institutional volume as “significant.”
“We’ve got some institutions that use the platform. These could be funds, these could be other regulated businesses that are offering exposure to cryptocurrencies to their customers. We provide liquidity to them. It’s actually a very mixed bag with a range of businesses.”
UK Prime Minister Theresa May confirmed recently that Britain will not have passporting rights post-Brexit, meaning Coinbase is unlikely to be able to use its newly acquired FCA license to cover activities across Europe.
Feroz said Coinbase would have to open a new office in the EU if a post-Brexit service deal is not reached. He said: “We haven’t quite decided where, there’s a bunch of factors that factor into that, such as the regulator, access to talent.”
Coinbase remains committed to the UK no matter what, Feroz said, with plans to boost staffing here by eight times into the “low hundreds.”
“The UK is a huge market for us, Brexit or no Brexit,” he said. “We’ve got access to a type of talent pool you can’t really get anywhere else besides the UK in Europe. We certainly intend to invest significantly in the UK office and the headquarters here. The roles we’re hiring from range from engineering to compliance and everything in between.”
Disclosure: The author is a customer of Coinbase in the UK.
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