Barclays and Coinbase have ended their relationship, leaving the cryptocurrency exchange temporarily outside of the UK's Faster Payments Scheme (FPS), according to reports.
Early last year, Barclays became the first major UK lender to strike a deal with a global cryptocurrency exchange, giving Coinbase a connection to FPS which enabled customers to instantly deposit and withdraw fiat money.
But, little more than a year on, the relationship is now over. As Coinbase explained in a blog, FPS is now temporarily off the table, with the firm offering to reduce trading fees as a sop to inconvenienced users.
In the longer term, FPS is set to return by the third quarter thanks to a new relationship between Coinbase and challenger bank ClearBank, according to crypto news site CoinDesk.
Barclays and Coinbase have not commented on the end of their relationship but big banks have generally avoided working with crypto firms over regulation and risk concerns.
According to CoinDesk sources, Coinbase's decision this week to de-list zcash from its exchange in the UK is the result of concerns at ClearBank about the privacy-focused currency.
Seperately, HMRC has approached Coinbase and two other crypto dealers in the UK - eToro and CEX.IO – to request lists of customers’ names and three years worth of transaction histories. HMRC defines a taxable event as users selling their cryptocurrencies or swapping them for other digital assets. Holders are liable to pay Capital Gains Tax on crypto in the UK and could face a tax charge of up to 20% of a transaction’s value, depending on income and capital appreciation.
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