Crypto exchanges are damaging banking

According to sources, cryptocurrency exchanger London Block Exchange has opened a bank account with British startup ClearBank, which will allow their users to trade cryptocurrencies without transferring funds abroad.

Major UK and European lenders have largely avoided cryptocurrencies, which have recently come under regulatory scrutiny. 

ClearBank is a clearing bank created by the founder of the Worldpay payments group, Nick Ogden. According to anonymous sources, the bank has struck a deal with the London Block Exchange, one of the UK's most popular crypto exchanges.

“Their collaboration will make it easier for UK customers to buy and sell digital currencies, and will make crypto transactions faster and cheaper,” said a source with knowledge of the agreement.

The crypto exchange and ClearBank declined to comment on the matter.

Traditional lenders are reluctant to do business with companies that deal with bitcoin or other cryptocurrencies due to money laundering concerns in this area, as well as the prospect of possible regulatory crackdown.

Major lenders have also limited the ability of their clients to buy cryptocurrency due to fears that its high volatility will lead to a large number of unpaid debts.

British cryptocurrency companies are usually forced to open accounts outside the UK - in Poland, Latvia, Gibraltar, Malta - and convert pounds into euros or other currencies. This raises many legitimate questions about the UK's stated desire to become the center of the fast-growing fintech industry.

Despite this, San Francisco-based crypto exchange Coinbase managed to close a deal and open an account with British bank Barclays.

ClearBank was created as a clearing bank that offers its services to construction companies, credit unions and fintech firms that need banking services.

According to uk.reuters.