Coinbase's business in the UK does not seem to be going well. Yesterday, the Santander UK branch said it would no longer provide support for Coinbase payments. Has the bank changed its position on cryptocurrency?
Santander and Coinbase draw a line
On August 14, Reddit user Cheat69 broke the news that Santander's UK branch will stop its services for the cryptocurrency exchange Coinbase. Cheat69 says:
“I just had a call with a representative of Santander in the UK. He told me that they would no longer allow customers to deposit money into Coinbase. Their 'complaint handling department’ confirmed to me if I wanted to do this. Class payment, it is best to change to a bank. They say that this is probably because of more and more fraudulent activities related to Coinbase."
Is it a policy issue or an incident?
Santander's UK branch has not officially announced the news. The move surprised the cryptocurrency community because the bank has always been friendly to blockchain technology.
In 2018, Santander became the first bank to use the Ripple blockchain product xCurrent to handle cross-border payments.
Interestingly, before Santander made the decision, another old British bank, Barclays Bank, also issued the same announcement on August 14. Coinbase appears to have been deprived of the right to enter the UK Rapid Payments Program (FPS).
Earlier this month, the UK Financial Market Conduct Authority (FCA) issued a cryptocurrency regulatory framework that defined digital tokens. It divides cryptocurrencies into three categories: transactional tokens, securities tokens, and application tokens. Therefore, the different types of tokens are supervised by different institutions.
However, the introduction of this policy does not seem to allow some cryptocurrencies to be recognized in the country. Earlier this week, Coinbase UK removed the privacy currency Zcash. Earlier, the UK Revenue Agency also required cryptocurrency exchanges, including Coinbase, to provide user information for tax recovery. It can be seen that the anonymous currency such as Zcash makes the British regulatory authorities feel uneasy about management. Similarly, banks that cooperate with Coinbase do not want to assume this responsibility.
Coinbase is temporarily unaffected
Although Coinbase has established a partnership with another bank, ClearBank, the UK's cryptocurrency investors will have no choice but to wait a few days before returning to the FPS system or Coinbase to find another licensed bank. Time converts the pound into euros and then completes the transaction through an Estonian bank.
Obviously only banks such as Barclays have the right to help Coinbase enter FPS, thus increasing the speed of GBP access.
An insider who asked not to be named said Coinbase is expected to return to FPS before the end of the third quarter.