Coinbase Granted UK E-Money License & Bank Account for UK, EU Markets
Major cryptocurrency exchange Coinbase is making significant strides in its European expansion.
San Francisco-based Coinbase has now received an e-money license by the Financial Conduct Authority (FCA), the UK’s financial regulator, enabling the cryptocurrency exchange to provide payment- and electronic money services as cash alternatives to customers in the United Kingdom and 23 countries within the European Union.
Coinbase UK chief executive Zeeshan Feroz claims the license mandates Coinbase to comply with ‘strict rules’ enforced by UK regulators. In addition, Coinbase is laying claim to becoming the first cryptocurrency exchange to obtain its own UK-based bank account wherein Coinbase will join the UK’s Faster Payments Scheme for faster and more efficient bank transfers. When implemented, UK customers will be able to send and receive fiat pounds to/from Coinbase at a significantly faster pace than the existing system.
While Coinbase hasn’t confirmed its banking partner, the Financial Times is reporting that Coinbase UK has secured a bank account with Barclays, one of Britain’s biggest banks.
Coinbase UK currently uses an Estonian bank to process withdrawals and deposits from local customers. The new license will see customers’ fiat funds separated from Coinbase’s own funds, placed in different bank accounts. In other words, Coinbase’s UK subsidiary is closer than it has ever been to playing by the rules as a recognized financial institution.
“We are committed to making sure customer funds are always secure and this update means that our e-money operations have safeguards and operational standards at par with other regulated financial institutions,” explains CEO Feroz. “An example of this is segregation of client funds, where all customer fiat balances will be separated from Coinbase’s funds and kept in separate bank accounts.”
With its newly-acquired e-money license and its own bank account, Coinbase adds it intends to meet the increased demands of the European market which, it claims, grew twice as fast as any other market globally in 2017. To meet that demand, Coinbase is notably planning to expand its London-based team by eight times the current employee count by the year’s end.
The UK’s FCA has previously granted its e-money license to bitcoin startup Circle in April 2016.