The most renowned banking relationship in crypto has ended.
Previously, Barclays, the London-based global bank, announced it is no longer working with cryptocurrency exchange Coinbase, industry sources said.
Meanwhile, Coinbase found a replacement in U.K. upstart ClearBank.
Clearbank is a younger and less stable operation, according to news reports.
The shift has indirectly disrupted the exchange’s users, according to people familiar with the situation.
Additionally to the distinction of working with a household-name bank, Barclays connected San Francisco-based Coinbase to the U.K. Faster Payments Scheme (FPS).
It is enabling users to immediately withdraw and deposit British pounds at the exchange.
The end of the bond disrupted Coinbase’s access to FPS, which in turn decelerated deposits and withdrawals in GBP for U.K. customers. Now, the procedure takes days to process.
The situation is temporary for it still adjusts to new processes.
In recent years, one of the U.K. “challenger banks”, ClearBank, has grown up in participating with market incumbents. It is also Coinbase’s new partner in banking.
By the end of the third quarter, ClearBank is likely to reestablish Coinbase’s FPS access.
Barclays, ClearBank, and Coinbase all declined to respond.
Removal of Privacy-Centric Cryptocurrency
Earlier this week, Coinbase delisted zcash, the privacy-centric cryptocurrency. It is using a technology called zero-knowledge proofs to cover details of transactions from blockchain watchers.
In addition, a person familiar with the decision said it was “completely to do with the new bank”
ClearBank was distressed on indirectly supporting a currency with features that make law enforcement’s job harder.
Coinbase was not the only crypto company to successfully pursue Barclays.
In 2016, when the bank was more enthusiastic about the technology, Barclays said it was working with Circle Internet Financial.
This company’s main offering at the time was Circle Pay. It is an FCA-regulated app that uses bitcoin to help enable no-fee currency transfers.
Barclays held the customer deposits.
At that time, Barclays stated, “we can confirm that Barclays Corporate Banking has been chosen as a financial partner by Circle.”
Lastly, it also added, “We also support the exploration of positive uses of blockchain that can benefit consumers and society.”
This is not to say ClearBank is giving Coinbase full discretionary power.