Coinbase (COIN.US) 'Excluded' by UK Financial Lobbying Group Deepens Differences Between Crypto Industry and Traditional Banks

The Zhitong Finance App learned that the US cryptocurrency exchange Coinbase (COIN.US) has been disqualified from membership by UK Finance, the most influential financial services lobbying organization in the UK. As the influence of the digital asset industry in global policy discussions continues to expand, differences of interest between crypto companies and traditional banks on issues such as stablecoins and access to banking services are also becoming more prominent.

According to people familiar with the matter, the UK Finance board sent a letter to Coinbase last week announcing the termination of its membership. According to people familiar with the matter, UK Finance said in the letter that its board of directors reviewed the membership framework and determined that the cryptocurrency exchange did not meet the organization's membership criteria. Coinbase can appeal this decision.

UK Finance claims to represent the UK financial industry and currently has around 300 member institutions, including major British and international banks, as well as financial market infrastructure and payment companies.

Coinbase's membership comes as the crypto industry is playing an increasingly important role in global financial policy discussions. There are clear differences in positions between crypto firms and traditional financial institutions, particularly banks, on some key regulatory issues. The company and its CEO Brian Armstrong have actively participated in digital asset policy discussions in recent years and publicly expressed industry positions on issues such as the crypto market regulatory framework and stablecoins.

This disagreement has recently been particularly prominent in the US debate over stablecoin reward mechanisms. Crypto companies advocate allowing users to earn rewards through stablecoins, while banking organizations are concerned that such products may attract capital from traditional bank deposits to digital asset platforms. Stablecoin rewards have also become a focus of controversy in US crypto market structure legislation discussions. The recent legislative process relating to the CLARITY Act has been thwarted, and conflicts of interest between the banking industry and the crypto industry are an important part of the related policy debate.

At the same time, the crypto industry has also continued to increase investment in US policy in recent years, hoping to promote the establishment of a more clear digital asset regulatory framework.

Similar conflicts are also emerging in the UK. One of the core issues is whether crypto companies can successfully access traditional banking services. For a long time, some digital asset companies said that restrictions imposed by some British banks on crypto-related businesses have made it more difficult for consumers to transfer money to digital asset platforms, while also making it more difficult for crypto companies to open and maintain bank accounts.

On July 21 of this year, the British Parliament's Cross-Party Crypto and Digital Asset Parliamentary Group (APPG) officially launched an investigation into access to banking services in the digital asset industry, focusing on two aspects: first, whether crypto companies can obtain bank accounts, payments, and other necessary financial services; second, restrictions imposed by banks on crypto-related transactions. The team said it has received feedback from the industry that it is difficult for some companies to open or maintain bank accounts, while some banks will block payments to specific crypto companies or set quota limits on related transfers. The survey will examine the appropriateness of these measures and their impact on consumers, businesses, innovation, and competition.

In August of this year, the bipartisan parliamentary group further wrote to the CEOs of major banks in the UK to explain their policies relating to the provision of banking services to crypto and digital asset companies.

It is worth noting that Coinbase's membership was cancelled by UK Finance this time is that the agency itself is an important representative organization of the traditional British financial industry, and Coinbase is one of the largest cryptocurrency trading platforms in the world. As digital assets gradually enter payments, stablecoins, tokenization, and other traditional financial business fields, the two camps not only have room for cooperation, but also increasingly face direct commercial conflicts of interest.

The UK government is also currently modernizing the regulation of the payment system. The relevant consultation document released in July this year clearly included innovations such as tokenized payments, open banking, and AI smart payments in the scope of discussions, while emphasizing the need to balance supporting innovation and protecting consumers.