CoinBase, one of the largest cryptocurrency platforms, now has an E-Money license from the Financial Conduct Authority (FCA). This comes as it expands its territory into Europe and becoming the first cryptocurrency exchange to adopt UK’s Faster Payments Scheme (FPS).
E-License Protects CoinBase UK and EU Customers
From a legal standpoint, this E-Money license allows CoinBase to provide payment services and to issue digital cash alternatives enabling easy deposits and withdrawals.
Through a blog post, CoinBase U.K. CEO Zeeshan Feroz said:
“The license requires CoinBase E-Money operations to meet the strict rules enforced by the FCA and the Payment Services Directive”
Most importantly, the objective is to protect the client. As such they plan to introduce clear policies separating clients’ deposits from the CoinBase’s operational funds. This means that even if the company ceases to operate, client investments will not go down with it.
CoinBase Collaborates with Barclays on FPS
In spite of having a global reach, CoinBase reported that its cryptocurrency business in Europe more than doubled in 2017.
Consequently, the company in collaboration with Barclays bank is working on creating U.K.’s Faster Payment Scheme (FPS) to speed up the time it takes to send and receive money. The program will begin with a pilot testing phase among a few of its institutional users before opening its doors to the public.
“In the coming weeks, we will begin rolling out to all U.K. customers, making the CoinBase experience increasingly easier”
For clarity, a spokesman elaborated that e-money is different from cryptocurrencies. This means there is no regulatory protection of customer funds contrary to what a full banking license does.
However, the E-Money license does not state anything about the safety of customer’s CoinBase Wallet. There is caution. Due to government pressure to track illicit activities in the money market, institutions are reluctant to handle funds from cryptocurrency exchanges.
Ultimately, this license will allow CoinBase to have better service delivery through partnerships with other companies. To soak increasing demand for cryptocurrencies in the UK, CoinBase shall increase its London team 8X.