Coinbase’s New Banking Partner a Ray of Hope Amidst Struggles in US Banking Sector

Coinbase
Global Inc. has formed a strategic partnership with Standard Chartered in
Singapore to offer its clientele a seamless solution for transferring funds
between any financial institution and the <a href=”https://www.financemagnates.com/terms/c/cryptocurrency-exchange/” class=”terms__main-term” id=”601e2e5f-0c28-4253-9ad4-5e6b251ba2fa” target=”_blank”>cryptocurrency exchange</a>. This
collaboration comes at a crucial time when traditional banking services for
digital asset service providers are becoming increasingly scarce due to the
growing regulatory pressure and the <a href=”https://www.financemagnates.com/institutional-forex/after-silicon-valley-bank-collapse-us-fed-announces-internal-investigation/” target=”_blank” rel=”follow”>recent collapse of crypto-friendly banks</a> like
Silicon Valley Bank (SVB) and Singature Bank in the US.Coinbase Finds New Banking
Partner in SingaporeAccording
to the Coinbase statement published on Wednesday, Coinbase customers may use
Singapore dollars for transfers via local banking institutions operating in the
Asian country without additional charges. According
to Ankur Kanwar, Head of Cash Products for Singapore and ASEAN at Standard
Chartered, the collaboration between Coinbase and the bank will empower users
to conduct real-time transactions while enabling automatic reconciliation of
user accounts by the exchange.In an
interview with Bloomberg, Hassan Ahmed, the Country Director for Coinbase
Singapore, mentioned that Standard Chartered will provide the facility to on-
and off-ramp their funds. Ahmed highlighted that the current scenario for
banking integration contrasts with the current uncertainty of the markets. However,
he further revealed that the negotiations with Standard Chartered had been
underway prior to the recent downfall of three US banks in the past week.Coinbase’s
finding of a new banking partner is worth highlighting, especially when several
major cryptocurrency companies are struggling to find similar partners and
replacements in the US since the turmoil in the local banking sector began last
week.Operations
were first halted by Silvergate Capital Corp. And then followed by SVB and
Signature Bank. The cessation of operations by those mentioned above is painful
for the cryptocurrency industry, as they provided 24/7 service, ensuring the
free flow of funds into and out of this booming sector.Last year, Coinbase <a href=”https://www.financemagnates.com/cryptocurrency/news/coinbase-gains-in-principal-approval-from-singapores-mas/” target=”_blank” rel=”follow”>received </a>in-principal approval from the Monetary Authority of Singapore (MAS),
thus gaining the status of a Major Payments Institution under the local Payment
Services Act. MAS’ digital payment token license is considered to be one of the
most stringent approvals for cryptocurrency companies.<blockquote class=”twitter-tweet”>Hello Singapore 🇸🇬Excited to announce we have received an In-Principle Approval as a Major Payment Institution in the Lion City! This is an important step in our mission of being the most trusted crypto platform in Asia Pacific.<a href=”https://t.co/pc2pkTl7yG”>https://t.co/pc2pkTl7yG</a>— Coinbase (@coinbase) <a href=”https://twitter.com/coinbase/status/1579678744348098560?ref_src=twsrc%5Etfw”>October 11, 2022</a></blockquote>After Signature Bank
Collapse, Coinbase Discloses Massive ExposureCoinbase is
one of those cryptocurrency service providers that directly felt the adverse
effects of the US banks’ collapse last week. The exchange <a href=”https://www.financemagnates.com/cryptocurrency/signature-bank-collapse-coinbase-and-paxos-disclose-massive-exposure/” target=”_blank” rel=”follow”>has revealed a $240
million deposit</a> with Signature Bank. However, the exposure did not affect
Coinbase’s operations, as the exchange currently processes transactions through
other banking partners.<blockquote class=”twitter-tweet”>All client cash at banks continues to be protected by FDIC pass-through insurance. Due to FDIC’s hold on Signature’s transactions, we’re currently facilitating all client cash transactions with other banking partners.— Coinbase (@coinbase) <a href=”https://twitter.com/coinbase/status/1635066153348521984?ref_src=twsrc%5Etfw”>March 12, 2023</a></blockquote>”Despite
the turbulence we have seen in the traditional banking sector recently,
Coinbase continues to operate as usual. At Coinbase, all client funds continue
to be safe and accessible, including USDC conversions which will resume on
Monday,” Coinbase added.Panic was
also evident for a while on Coinbase (<a href=”https://www.financemagnates.com/tag/coinbase/” target=”_blank” rel=”follow”>NASDAQ:COIN</a>) shares, which lost more
than 17% last week. However, they are recovering most of their losses this week
and are back above $62.At the end
of February, the <a href=”https://www.financemagnates.com/terms/e/exchange/” class=”terms__secondary-term” id=”b5da6e64-2afe-421d-9b81-16404b7d59d6″ target=”_blank”>exchange</a> published its <a href=”https://www.financemagnates.com/cryptocurrency/news/coinbase-beats-market-expection-despite-drop-in-q4-transaction-revenue/” target=”_blank” rel=”follow”>fourth quarter results</a>, reporting a
loss of $557 million and a 75% decline in net revenue to $605 million compared
to last year. However, quarterly revenue exceeded analysts’ expectations of
$588 million.