Coinbase has been granted an e-money license by the UK Financial Conduct Authority (FCA), which means that they are now able to provide payment services in the UK. They were one of the first cryptocurrency exchanges to be granted an e-money license.
What Does This Mean?
In other words?
This means that residents in the UK can now send GBP to Coinbase and also withdraw funds in GBP back to their bank account. Coinbase also supports UK Faster Payments, which means that you can send money with UK bank transfer to your Coinbase account and have it credited in under an hour.
Previously, lots of UK residents were:
- Sending GBP to Revolut and exchanging it for EUR.
- Sending those EUR with a SEPA bank transfer to Coinbase.
- Buying Bitcoin (BTC) with EUR on Coinbase Pro with low fees.
There’s no need for this anymore, which means that the process is much faster.
With the issue of this e-money license, Coinbase is required to segregate client and business GBP funds. This means that if Coinbase goes up in flames, your funds won’t disappear into the void.
Confusingly though, GBP balances on Coinbase still aren’t protected by the Financial Services Compensation Schemes (FSCS). This is a step in the right direction, but this means it isn’t a great idea to leave your funds idle in Coinbase.
If you’re not already aware, Coinbase does hold insurance for cryptocurrencies which are held online (i.e. in hot wallets). They say that’s about 2% of total funds, with the rest held in offline storage (e.g. cold storage). If they suffer a breach, then you’d be covered.
This insurance does not apply in the event that you’ve been negligent with your security though. To make sure you’re keeping your computer, accounts, and cryptocurrency secure, check out:
Buy Bitcoin Cheaply in the UK
For an overview of how you can use Coinbase to buy Bitcoin (BTC) in the UK at market-leading rates, check out my guide: Buy Bitcoin Cheaply in the UK.