It appears that the love affair between Coinbase and Barclays bank has come to an end. The U.K.-based financial institution embraced Coinbase in March of last year when it allowed the U.S.-based cryptocurrency firm to open an account, but has reportedly decided to sever the relationship. The decision will not sit well with the crypto community, or with Coinbase’s plans for expansion
Coinbase announced at the end of July that it had “temporarily removed Faster Payments Scheme (FPS) support for domestic GBP deposits and withdrawals” for its U.K. customers. It added that the decision would result in benefits to the customers, including a reduction in trading fees from August 1 to 15. While that may have appeared to be a positive action for crypto fans using the platform, it now appears as though it was nothing more than lipstick on a pig.
Coindesk reports that the real reason for the change was the move by Barclays to end its relationship with the crypto company. One anonymous source told the news outlet, “It is my understanding that Barclays’ risk appetite has contracted a little — I’m not sure exactly why or what’s been driving that, maybe there has been some activity they are not happy with. But it’s about Barclays’ comfort level with crypto as a whole.”
This doesn’t mean that Coinbase will leave the region, at least not yet. It still has a relationship with Clearbank, a smaller financial institution that is still in its growing phase.
Coinbase is having to suffer through a chaotic growth spurt. It has seen a number of high-profile executives leave the company over the past several months and has made a couple of decisions that provoke images of desperation. After of the suspension of the FPS support in the U.K., it raised its minimum deposit requirements to £1,000, which was ostensibly in an effort to minimize fraud on the exchange, but there aren’t many scenarios imaginable where someone would perpetrate a fraud for, say, just £400. The risk is far greater than the reward.
Despite reported strong finances, Coinbase has had, since its inception, a lot of difficulty finding its real footing. It has had to deal with massive negative feedback from users, delayed withdraws, questionable acquisitions, service suspensions and more than a few bugs. While none of these is singularly attributable solely to Coinbase, the sum of them all could shake consumer confidence.
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