London startup ClearBank has reached a deal with the London Block Exchange, a popular UK cryptocurrency exchange, according to Reuters. This will allow for greater support for the UK market which is more crypto friendly than the US in terms of taxes and securities law.
A source told Reuters: “This will make it easier for British customers of the exchange to buy and sell cryptocurrencies by making transactions faster and cheaper.”
ClearBank is the UK's first clearing bank in 250 years and was founded by Nick Ogden, founder of Worldpay. They offer banking services to FCA Regulated Businesses, Financial service providers and FinTech. In their 2017 Annual Report, it said: "The ClearBank mission is to deliver an open and competitive marketplace utilizing state of the art technology."
The London Block Exchange is a cryptocurrency exchange focused on the UK market and on educating investors. They have a 'College of Crypto' which explains the major cryptocurrencies and explores the regulatory side of them. They have recently added Status (SNT), 0X (ZRX) and Golem (GNT).
In their manifesto, it states: We are helping to build a part of the new financial ecosystem, enabling anyone to trade cryptocurrencies in an easy to use, safe and secure environment.
The UK market accounts for about 5% of cryptocurrency trading but users have barriers to accessing cryptocurrency markets as banks have been reluctant to provide support. Currently, Coinbase accepts payments in Great British Pounds (GBP) but users have to use a SEPA transfer in euros (EUR) or go via Revolut to withdraw their money. However, the UK does not tax cryptocurrencies for capital gains tax, unlike the US, and ICOs, in general, do not ban UK citizens from participating whereas US citizens are often excluded. This is due to fears over US securities law which can impose high penalties on companies that are selling unregistered securities.
Coinbase is working on bringing back GBP-based withdrawals according to their website. Recently, they announced that they are opening an account with UK bank Barclays. This may provide support for them to continue their dominance over the market and develop further with the UK market. Barclays has also announced a venture capital unit to invest in modern technologies, such as blockchain, that could help make them more competitive.