BCS Barclays PLC

By Margot Patrick 

Barclays PLC has become a rare global bank to embrace the cryptocurrency sector by signing exchange operator Coinbase as a customer.

Deposits from Coinbase users in the U.K. will be held in a new customer account at Barclays, Coinbase UK Chief Executive Zeeshan Feroz said Wednesday, amid what he called "a huge surge of interest" in the country to trade bitcoin and other digital currencies.

Mr. Feroz said the European Union, led by the U.K., was Coinbase's fastest-growing market in 2017. The San Francisco-based startup, one of the most prominent bitcoin-focused businesses, plans to have hundreds of people working in its London headquarters by the end of the year, up from dozens now.

Working with Coinbase is a big stride for Barclays into a sector that many banks have so far shunned for being too risky. Bitcoin and other cryptocurrencies aren't backed or controlled by any government, and global regulators are still grappling with how to supervise trade in the currencies and related activities.

Mr. Feroz said Barclays's involvement showed how perceptions have changed toward the sector as it seeks to shake off its early image as a haven for illicit activity. A spokesman for Barclays declined to comment, citing client confidentiality.

Mr. Feroz said Coinbase has also received a license from the U.K. financial regulator to issue electronic money and provide payment services in the U.K. and across the EU, adding another layer of legitimacy to its business. He said Coinbase already followed regulatory rules on new customer checks and anti-money-laundering procedures, but that the Financial Conduct Authority authorization shows the company's compliance programs and operational standards are "on par with traditional financial services business."

Getting a U.K. banking partner should clear up a big complaint from Coinbase users in the country: They can't deposit or withdraw in their home currency. Right now, deposits and withdrawals by U.K. customers on Coinbase's GDAX exchange must be made in euros through a process that takes at least a day and involves a bank in Estonia. Tapping into the U.K.'s Faster Payments Scheme via Barclays, the transactions can be made in sterling immediately.

Meanwhile, Estonia's LHV Bank, which currently processes Coinbase's euro-denominated transactions, said it is working on getting sterling payments up and running for its customers, after receiving approval from the Bank of England in February to open a U.K. branch.

(END) Dow Jones Newswires

March 14, 2018 13:23 ET (17:23 GMT)

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