Digital currency exchange Coinbase has been granted an e-money license by the UK’s Financial Conduct Authority (FCA) and joined the Faster Payments Scheme as an indirect member courtesy of a tie-up with Barclays Bank.
While other major lenders shy away from the cryptocurrency markets, Barclays Bank is the first to strike a deal with a major global exchange, enabling the fast settlement of fiat money transfers to UK customers.
The bank has been in active talks with UK regulatory bodies over how it can bring cryptocurrencies into play in the UK, with the granting of an e-money license seen as an essential prerequisite. Barclays struck a similar deal with social payments outfit Circle - which enables sterling, dollar and bitcoin money transfers across popular messaging platforms and other media - shortly after it won approval from the watchdog in April 2016.
Having won over the FCA, Coinbase plans to start with a pilot, giving a small number of institutional users access to Faster Payments before a roll out to all UK customers.
Coinbase first began offering its service to European users in 2014. It says that EU market demand grew twice as fast as any other territory in 2017, with the UK being the most active.
The firm says the e-money license will enable it to pass through regulatory barriers beyond the UK to 23 countries within the EU, although such an arrangement may not withstand a Brexit break in relations between the UK and its continental neighbours.
Coinbase currently has six openings in London for staff in compliance and back-end engineering and plans to grow its headcount 8x by then end of the year.
The US-based firm will not be the only cryptocurrency exchange in the Faster Payment Scheme, with news of a similar opening for home-grown outfit London Block Exchange also filtering through.
Beginning today, LBX is offering a Crypto Payment Account which will enable the instant transfer of GBP to digital currencies. The company has not provided details of the bank sponsor for FPS access.