Step Back Closed Retail Streets: Could Coinbase Become the UK’s Next Major Bank?
Coinbase is making a significant move toward mainstream finance in the UK. The firm is launching a savings account that mimics those usually offered by conventional banks, providing a 3.75% AER on cash deposits.
The new account was revealed on November 11 and is initially available to select users. It accrues daily interest, imposes no minimum balance, and allows immediate access to funds.
Is Coinbase Now in Direct Competition With UK Banks?
It also includes FSCS protection, offering customers a similar level of safety as that provided by high-street banks.
The account operates through ClearBank, but is integrated within Coinbase’s ecosystem. It gives users a method to hodl and earn interest on pounds without needing to move funds to another app or bank.
For Coinbase, this marks a strategic transition. It positions the company in direct rivalry with UK banks and finance applications that promote easily accessible savings.
Deposits are kept with ClearBank and are protected under FSCS, covering up to £85,000 per eligible individual. Coinbase claims this is the first savings account in the UK offered by a crypto-focused trading network.
The launch follows Coinbase’s acquisition of VASP registration from the Financial Conduct Authority in February. Since then, the company has referred to the UK as its largest trading market outside the United States.
Last week, the Bank of England maintained the Bank Rate at 4.0%. This rate typically influences variable savings products. FSCS security remains at £85,000, although the Prudential Compliance Authority has suggested increasing the cap to £110,000.
DISCOVER: Top Solana Meme Coins to Buy in 2025
How Does Coinbase’s FSCS-Protected Savings Account Function?
According to Coinbase’s help pages, the savings rate may fluctuate, particularly in response to decisions made by the Bank of England. Interest is accrued daily and is paid out once it reaches at least one penny.
FSCS coverage applies to all funds managed by ClearBank. Coinbase’s shares dropped to approximately $310.78 on Tuesday as the broader crypto market tempered.
CEO Brian Armstrong stated that providing “a high-interest and instant-access savings account” within the Coinbase app is part of their initiative to modernize financial services for UK users.
ClearBank UK’s chief, Emma Hagan, described the partnership as a way to connect traditional currency and digital assets, according to comments shared with Finextra and ClearBank.
This initiative integrates a bank-like, FSCS-protected savings feature into a crypto protocol, bridging the divide between exchanges and traditional banks.
It could assist Coinbase in maintaining customer deposits on its network for extended periods and enhancing cash reserves.
The launch also gauges how far regulated banking functions can be incorporated into digital-asset companies.
Observers note that Coinbase has reinforced its compliance measures in Britain over the past year, while European regulators continue to scrutinize anti-money laundering protocols across the industry.
EXPLORE: How to Buy Bitcoin Anonymously in 2025
The post Stand Aside Shuttered High Streets: Is Coinbase the UK’s Next Big Bank? appeared first on 99Bitcoins.
