Published: Thu, March 15, 2018
Business | By Tara Barton

Coinbase UK granted e-money license, enables Faster Payments Scheme

Coinbase UK granted e-money license, enables Faster Payments Scheme

The license will allow Coinbase to issue e-money and provide payment services across Europe.

We are happy to announce that Coinbase has received an e-money license from the Financial Conduct Authority (FCA) in the UK.

This means that UK Coinbase users will now be able to deposit and withdraw GBP using the domestic SWIFT system, instead of having to use Euro and the European SEPA system going via Coinbase's bank account in Estonia.

As a result of the new license, client funds will now be separated from Coinbase and held in separate bank accounts (presumably courtesy of Barclays).

"Having domestic GBP payments with Barclays reduces the cost, improves the customer experience. and makes the transaction faster", said Zeeshan Feroz, Coinbase's U.K. CEO.

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In other words, if Coinbase goes bust or ceases to operate as a business going forward, the idea is that any fiat currency the company is looking after on your behalf won't get absorbed with it. Note, it doesn't mean deposits are protected by the regulator itself - as a full banking license would do - nor does it say anything about how safe your Coinbase cryptocurrency wallet is. Nevertheless, Coinbase representatives highlighted that e-money is not just the same as cryptocurrencies, they are different things. It's not the same as having a proper banking licence, which would offer extra regulator protection to stored funds, but it is a big step that makes it easier for the exchange to operate and deal with customers in the United Kingdom and, by default, the rest of the EU.

It requires Coinbase's e-money operations to meet the strict rules enforced by the FCA and the Payment Services Directive. It will first launch as a pilot, giving a small number of Coinbase's institutional users access to Faster Payments.

The UK is the largest market for Coinbase in Europe, and the exchange said its customer base in the region was growing at twice the rate of elsewhere.

Mainstream banks have long maintained that stopping people from using credit to buy bitcoin and the larger family of cryptocurrencies will calm the current volatility in the cryptocurrency market. He also reported that Coinbase planned to increase its team in London by 8x in the coming year. "We believe that this is an important step towards our commitment to making cryptocurrency accessible to everyone".

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