Coinbase is making inroads into Britain’s retail banking sector with a new savings account that offers 3.75% AER variable interest, in a bid to rival traditional UK banks.

According to an official release, the crypto exchange, in partnership with ClearBank, is offering daily interest payments, instant deposits and withdrawals, and FSCS protection for balances up to £85,000, making it the first crypto-native exchange to roll out a bank-style product in the UK.

Under the new program, eligible UK users can open a savings account directly within the Coinbase app, earning 3.75% AER paid daily on GBP balances.

The partnership with ClearBank, a regulated UK institution, ensures deposits fall under the Financial Services Compensation Scheme (FSCS), providing protection equivalent to that of major banks such as Barclays or Lloyds.

“Supporting a high interest and instant access savings account alongside Coinbase’s most trusted crypto exchange with stablecoins, 260+ assets, is a step on the path to updating the financial system for the UK.” Coinbase Keith Grose said.

Coinbase’s 3.75% Rate Competes With Traditional Banks

The average easy-access savings rate in the UK currently hovers around 4.2%–4.5% AER, according to data from MoneySavingExpert and Money.co.uk.

While Coinbase’s 3.75% rate sits slightly below top-tier offers, it exceeds many standard flexible accounts. Major high-street banks, such as HSBC and NatWest, still pay between 1.15% and 3.5% on similar deposits.

According to Keith Grose, CEO of Coinbase UK: “Our aim is building the UK’s number 1 financial app.”

This means the goal is to be Revolut, not Binance.

Just as it’s Coinbase vs Robinhood in the US, it could be Coinbase vs Revolut in Europe.

“Barclays, NatWest, and HSBC can all match or beat 3.75%, but none let you move GBP to BTC in the same app,” said Simon Taylor, a London-based fintech analyst.

“It’s not just about the rate, it’s about capturing users who want seamless access between their GBP savings and crypto portfolios,” Taylor added.

He sees Coinbase becoming a safe haven for Brits to bank and challenged UK banks to catch up.

The Bank Disintermediation Threat

The launch comes amid growing concern that crypto-linked products could drain deposits from traditional banking.

Standard Chartered recently warned that over $1 trillion could flow out of emerging-market banks into stablecoins by 2028.

The Bank of England has repeatedly warned that digital money adoption could trigger “bank disintermediation“, where households shift deposits into digital alternatives, threatening financial stability and credit availability.

Citigroup’s Ronit Ghose drew parallels to the late 1970s when money market funds skyrocketed from $4 billion to $235 billion in seven years, draining bank deposits.

However, Coinbase’s Faryar Shirzad countered that the “stablecoins will destroy bank lending” narrative ignores reality.

According to him, “Most stablecoin demand comes from outside the US, expanding dollar dominance globally, not competing with your local bank.”

UK £20,000 Stablecoin Cap vs Coinbase £85,000 Savings Limit

Coinbase’s savings launch comes just days after the Bank of England proposed a £20,000 cap on stablecoin holdings for individuals.

Yet Coinbase allows deposits up to £85,000 with FSCS protection.

This effectively allows the crypto exchange to offer a higher balance ceiling than permitted under the new stablecoin limits, potentially luring Brits to opt for its savings option.

Tom Duff Gordon, Coinbase’s vice-president of international policy, told the Financial Times that “imposing caps on stablecoins is bad for UK savers, bad for the City and bad for sterling.“

Simon Jennings of the UK Cryptoasset Business Council added that “limits simply don’t work in practice” because issuers cannot monitor token holders in real time.

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