Swedish-based bitcoin exchange Safello has announced a new banking partnership that will see it add local deposit options for UK customers.
The firm says the move opens up the “underserved” British market for bitcoin buying and could spark a “wave of interest” in the digital currency.
Thanks to its new arrangement, Safello now supports payment methods including CHAPS, BAC and Faster Payments – the latter of which is free for standard UK bank accounts and takes around two to three hours to transmit funds.
Frank Schuil, Safello’s CEO and co-founder, told CoinDesk:
“Hopefully we are at the start of wider bitcoin adoption in the UK … There’s no reason for your stubborn colleague or conservative friend to stay on the sidelines anymore. Get with times, Uncle Phil!”
While confirming that the company’s new London-based partner is indeed a bank and not an intermediary financial services company, Schuil said he was not at liberty to divulge the name of the institution.
He did add, however, that the bank is aware that Safello operates in the bitcoin space.
The banking issue
The company’s announcement is notable because most bitcoin startups in the UK are currently forced to bank elsewhere in the EU. This is due to the fact that financial institutions are reluctant to get involved with cryptocurrency businesses due to their perceived high-risk factor.
As a result, customers are being asked to deposit funds via either international bank wire or SEPA transfers, which take several days to arrive and often charge hefty fees.
When asked why banks are so reluctant to engage with bitcoin companies, Schuil said:
“I would say that they are hesitant to potentially damage their relationship with other banks. They are dependent on each other and cannot isolate themselves.”
He continued: “That is why challenger banks are often on the forefront of bitcoin adoption. Additionally, the perceived AML [anti-money laundering] risk often outweighs the perceived reward at this stage of the market.”
Notably, London-based cryptocurrency exchange Yacuna has just announced GBP deposits for UK customers via SOFORT Banking. While fast, this does incur a 4.9% fee.
Schuil indicated the new relationship had come as the result of his company’s consistent operation since its founding in 2013.
“We had to build trust with our banking partners and this simply took time. However, the risk perception is changing and we expect other banks to follow suit in 2015. Bitcoin is no longer a fad.”
In late spring, the company partnered with Jumio for instant ID verification and, three months later, launched a free bitcoin fundraising service for charities. Since then, the exchange has also announced a new social media-inspired bitcoin wallet.
With 87 banks supported in 11 countries, the firm also offers a variety of fast payment methods for customers across the region.