We Finally Know Why Coinbase UK Dumped ‘Anonymous Crypto’ Zcash
CCN Markets: Coinbase users in the UK continue to get bad news, with the latest impacting Zcash holders specifically. The rumor mill began to churn this week when the cryptocurrency exchange unexpectedly dumped ZEC. Now there’s finally confirmation for at least one of the reasons that were bandied about.
UK-based banking giant Barclays severed its relationship with the cryptocurrency exchange. According to CoinDesk, Coinbase is now banking with ClearBank who reportedly demanded that the exchange delist Zcash.
Coinbase move shows crypto banking struggles remain in focus
The decision to give Zcash the cold shoulder understandably raised questions about how the move affects privacy-focused cryptocurrencies.
Jeffrey Tucker, Editorial Director for the American Institute for Economic Research, weighed in on the split, suggesting that it might portend more headwinds for Coinbase than for Zcash itself.
“Another solution for moving from Coinbase crypto to cash and back again will emerge. At the same time, it is not getting easier for crypto banking institutions like Coinbase. It is getting harder. Keep in mind that Coinbase is a financial intermediary itself, of the very type that crypto was supposed to make unnecessary.”
Instead of “individuating banking, the crypto market has largely developed into a mediated token market.” That’s led to it requiring another layer of onramps and off-ramps, Tucker said.
“There is a growing consensus that traditional Bitcoin, which enjoys a 65% market domination, is not suitable as a means of exchange. Other tokens might benefit from this shift. But the market is extremely crowded and will continue to shake itself out in the coming years.”
The problem with Zcash
Zcash is embraced by holders because of its optional privacy features. However, there are concerns about the so-called anonymous token not passing regulatory muster in the UK.
Zcash holders on Coinbase UK have until Aug. 26 to convert their holdings into any other crypto or run the risk of having them forcibly converted to sterling pounds, as CCN reported.