Failing either of these options being carried out, any Zcash still held on the exchange by the Aug. 26 deadline will be liquidated into GBP. The ZEC wallet will then be removed from the Coinbase account.
United Kingdom-based customers of Coinbase are reportedly being informed that the exchange will be dropping support for the privacy-focussed Zcash as of Aug. 26, 2019. The same does not appear to apply to United States or European Union customers, however, prompting speculation on the reasoning behind the move.
The communication being sent to customers gives a number of options on how to proceed. Option one, any Zcash held on Coinbase can be converted into any other cryptocurrency on the exchange. Option two, simply send the Zcash to an external wallet or another exchange.
Zcash still useable in the U.K.
The developer of Zcash, Electric Coin Company, confirmed the news on Twitter, but was quick to point out that this issue was limited to Coinbase customers.
“To pre-empt speculation, we confirm that Zcash is 100% compatible with UK regulations KYC/AML requirements”, they wrote, stating that no other exchanges in the U.K. were affected.
Why such a limited limitation?
The move drove many to speculate on the reasons behind it. UK-based Bitcoin entrepreneur Alistair Milne tweeted that the delisting was likely a precondition to Coinbase getting access to the U.K. faster payments system.
“I.e. it wasn’t a regulatory requirement, but a banking one”, he suggested.
Coinbase has been expanding its customer base rapidly of late, adding 8 million new users in the past year. Meanwhile Zcash recently forked to create a new blockchain network dubbed Ycash.
Wrapped Crypto Tokens, Explained
Many of the first wrapped assets were, in fact, fiat-backed stablecoins, such as tokens with prices pegged to the dollar – Tether, Coinbase’s USDC or TrueUSD. There are also euro, yen, yuan and countless other fiat stablecoins that are mostly based on the Ethereum blockchain.
These are backed accordingly via the reserves, with coins fed in according to the demand of online crypto exchanges and larger institutional investors who want to quickly exchange fiat money into crypto and manage their money within a given platform.
This makes it as easy to deposit dollars into DeFi applications and blockchain wallets as it does to have a reliable counter currency providing traders relief from crypto asset volatility. Other cryptocurrencies are beginning to launch wrapped versions of their tokens on Ethereum in larger numbers, with interoperability a vital consideration for solutions that want to be taken seriously.
