Coinbase gets e-money license in the UK, will add Faster Payments to speed up fiat deposits
By Steve O’Hear for TechCrunch
The will be welcome news for cryptocurrency fans in the U.K. and Europe. Coinbase, one of more popular and accessible cryptocurrency exchanges, has been granted an e-money license by the U.K. regulator the Financial Conduct Authority (FCA).
From a regulatory standpoint, this means that Coinbase is now able to issue e-money and provide payment services in the U.K. and will have passed additional checks in terms of things like the segregation of client funds, which means that customer fiat balances (ie when you deposit funds, such as Sterling) are separated from Coinbase’s own operational funds and kept in separate bank accounts.
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. But, either way, it is definitely a good and important step for Coinbase’s ability to better serve customers in the U.K. and the EU.
“The license requires Coinbase’s e-money operations to meet the strict rules enforced by the FCA and the Payment Services Directive,” writes Coinbase U.K. CEO Zeeshan Feroz in a company blog post. “For our customers, this will ultimately help us deliver a better experience through new partnerships and an easier to use product”.
Furthermore, Feroz says that Coinbase’s e-money license will extend beyond the U.K. to 23 countries within the EU (presumably under rules that permit the ‘passporting’ of financial services from one EU country to other, at least until the U.K. implements Brexit). “We believe that this is an important step toward our commitment to making cryptocurrency accessible to everyone,” he writes.
In addition, Coinbase is announcing that it is the first crypto-exchange to support the U.K.’s Faster Payments Scheme, which, once rolled out, will significantly speed up the time it takes U.K. customers to send and receive fiat money from Coinbase. It will first launch as a pilot, giving a small number of Coinbase’s institutional users access to Faster Payments. “In the coming weeks, we will begin rolling out to all U.K. customers, making the Coinbase experience increasingly easier,” notes Feroz.
Meanwhile, Coinbase says that the EU grew twice as fast as any of its other markets in 2017 and that the U.K. continues to be its largest market in Europe. In order to meet this increasing demand, the cryptocurrency plans to grow its London team 8x by the end of this year.
Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.