Barclays has taken the first step toward bringing controversial cryptocurrencies towards mainstream banking by teaming-up with San Francisco start-up Coinbase to make it easier for UK users to withdraw their money
Coinbase, one of the world’s largest cryptocurrency exchanges and wallets, obtained a bank account with U.K. lender Barclays, and will have access to the Faster Payment Scheme, the core payment infrastructure used by consumers to move money in the U.K.
According to an article on Business Insider, Coinbase’s U.K. head Zeeshan Feroz said, “There is no other exchange today that has access to domestic banking. UK consumers today have to jump through all sorts of hoops around sending money to European accounts using euros in order to get money in and out.”
Faster Payments will allow Coinbase’s U.K. customers “to see a vastly improved deposit and withdrawal experience,” Feroz said.
Coinbase, which has nearly 12 million users, also said it was granted an e-money license by the U.K. regulator the Financial Conduct Authority (FCA), and adds support for the Faster Payments Scheme (FPS).
What does this mean for users?
The most noticeable update will be Faster Payments which will simplify the process of topping up and withdrawing money from Coinbase. Previously, U.K. users had their transactions processed through an Estonian bank, which could take a few days.
“U.K. customers will benefit from faster, safer and seamless bank transfers. We will start with a pilot, giving a small number of 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,” Feroz said in a blog post Wednesday.
While U.K. users could top up money in pounds, they were unable to withdraw it easily back to their bank account in the same currency. Instead, it would have to go through a long process, converting the money into euros then back into pounds, leaving some users stung with exchange rate charges.
The e-money license from the FCA will extend to 23 countries within the European Union.
“We believe that this is an important step towards our commitment to making cryptocurrency accessible to everyone,” Feroz said.
British lenders have distanced themselves from engaging with cryptocurrency companies and digital coins in general, because of their reputation of being used in illicit activity.
U.K. financial authorities and regulators have warned on cryptocurrencies. Bank of England Governor Mark Carney recently called for greater regulation of cryptocurrencies, calling the huge price moves and volatility “speculative mania.”
Meanwhile, a group of British lawmakers launched an inquiry into digital currencies last month to look at the risks posed to consumers, businesses and the government.
Barclays has been one of the larger U.K. banks more open to engaging with cryptocurrencies. As early as last June, its U.K. Chief Executive Ashok Vaswani told CNBC it was talking to financial technology firms and the regulator about bringing virtual currencies “into play.”