Leading cryptocurrency exchange platform Coinbase has been granted an e-money license by the UK Financial Conduct Authority, opening up fresh access to UK and EU markets.
The license will allow Coinbase to offer a range of new services to customers in the UK and the wider EU, such as issuing digital cash alternatives, and providing payment services through digital currency.
Coinbase representatives, confirming the licensing approval on Wednesday, highlighted the distinctions between regular cryptocurrencies and e-money, and suggested that the new license would allow for a greater protection of client funds, as well as a range of new services for their customers.
“We are committed to making sure customer funds are always secure and this update means that our e-money operations have safeguards and operational standards at par with other regulated financial institutions. An example of this is segregation of client funds, where all customer fiat balances will be separated from Coinbase’s funds and kept in separate bank accounts.”
As a result of the UK’s membership of the European Union, the decision to grant the license means Coinbase is now eligible to operate their new services across 23 member states. However, in light of ongoing Brexit negotiations, and the forthcoming exit of the UK from the European Union, it remains unclear whether Coinbase will be able to rely on the EU dimension of their license in future.
Should there be difficulties post-Brexit, Coinbase has suggested it will need to wait on an additional license from another EU member state, before it can resume offering its services throughout the European market.
The news comes alongside a further announcement that Coinbase was joining the UK Faster Payments Scheme, which provides for efficient bank transfers between UK bank accounts, with clearance within a maximum of two hours.
It comes as part of a growing focus on European and UK markets from Coinbase, who are already expanding their London office by as much as eight times its current size, to cope with growing demand in London and beyond.
Complications from Brexit notwithstanding, the announcements today are well timed to give Coinbase a competitive edge, as they continue to grow their customer base in the EU.