Coinbase (COIN.US) "removed" from UK financial lobbying group as rift between crypto industry and traditional banks deepens.

The U.S. cryptocurrency exchange Coinbase (COIN.US) has had its membership revoked by UK Finance, the UK's most influential financial services lobbying group. As the digital asset industry's influence in global policy discussions continues to grow, the diverging interests between crypto firms and traditional banks over issues such as stablecoins and access to banking services are becoming increasingly prominent. According to people familiar with the matter, the UK Finance board sent a letter to Coinbase last week notifying it of the termination of its membership. The people said UK Finance stated in the letter that its board had reviewed its membership framework and determined that the cryptocurrency exchange did not meet the organization's membership criteria. Coinbase can appeal the decision. UK Finance describes itself as representing the UK financial industry and currently has about 300 member institutions, including major UK and international banks, as well as financial market infrastructure and payment companies. The revocation of Coinbase's membership comes as the crypto industry plays an increasingly important role in global financial policy discussions. On some key regulatory issues, clear divergences have begun to emerge between crypto firms and traditional financial institutions, especially banks. The company and its CEO, Brian Armstrong, have in recent years actively participated in digital asset policy discussions and publicly expressed industry positions on issues such as the crypto market regulatory framework and stablecoins. This divergence has been particularly evident recently in the debate in the United States over stablecoin reward mechanisms. Crypto firms advocate allowing users to earn rewards through stablecoins, while banking organizations worry that such products could draw funds away from traditional bank deposits toward digital asset platforms. Stablecoin rewards have also become one of the contentious focal points in U.S. crypto market structure legislative discussions. The recent setback in the legislative process for the CLARITY Act has seen conflicts of interest between the banking and crypto industries form an important part of the related policy debate. At the same time, the crypto industry has in recent years steadily increased its investment in the U.S. policy arena, hoping to promote the establishment of a clearer digital asset regulatory framework. Similar tensions are also emerging in the UK, with one core issue being whether crypto firms can smoothly access traditional banking services. For a long time, some digital asset firms have said that restrictions imposed by some UK banks on cryptocurrency-related business make it harder for consumers to transfer funds to digital asset platforms, while also making it more difficult for crypto firms to open and maintain bank accounts. On July 21 this year, the UK Parliament's All-Party Parliamentary Group (APPG) on Crypto and Digital Assets officially launched an inquiry into banking access for the digital asset industry, focusing on two aspects: first, whether crypto firms can obtain bank accounts, payments and other necessary financial services; and second, restrictions imposed by banks on cryptocurrency-related transactions. The group said it had received industry reports that some firms find it difficult to open or maintain bank accounts, while some banks block payments to certain crypto firms or impose limits on related transfers. The inquiry will examine whether these measures are appropriate and their impact on consumers, businesses, innovation and competition. In August this year, the APPG further wrote to the chief executives of major UK banks, asking them to explain their policies on providing banking services to crypto and digital asset firms. What makes Coinbase's removal from UK Finance noteworthy is that the organization itself is an important representative body of the UK's traditional financial industry, while Coinbase is one of the world's larger cryptocurrency trading platforms. As digital assets gradually enter payments, stablecoins, tokenization and other areas of traditional financial business, there is both room for cooperation and increasingly direct conflicts of commercial interest between the two camps. The UK government is also currently pushing to modernize the regulation of the payments system. A related consultation document published in July this year explicitly includes innovations such as tokenized payments, open banking and AI agent payments within the scope of discussion, while emphasizing the need to strike a balance between supporting innovation and protecting consumers.