Bitcoin – the word on everyone’s lips at the end of last year – is in the news again, though this time the graphs are all heading in the other direction.
The value of the cryptocurrency has nosedived in recent days, with a Bitcoin now worth less than £6,000, having been worth over twice as much in mid-December.
Now here at MSE we don’t usually cover Bitcoin, or indeed cryptocurrencies at all – though for a handy primer on the basics, see Martin’s Should you invest in Bitcoin? blog.
But in recent weeks we’ve had a number of emails from MoneySavers about Coinbase, a US-based digital currency exchange that allows you to trade various cryptocurrencies including Bitcoin and Litecoin for what’s technically known as ‘fiat’ currency – ie, normal currency run by a country like pounds, dollars and euros.
The most common question we’ve been asked is how you actually withdraw your money from the exchange, with one MoneySaver telling us this seems “impossible”.
It’s not, but the process is a little tricky, especially for anyone based in the UK. While you can purchase cryptocurrency via Coinbase using many standard UK debit and credit cards, taking money out is not as straightforward. The key point to understand is that you can’t simply withdraw your money in pounds – you’ll need to get it out in euros instead.
So if you’ve got cash in Coinbase and want to withdraw it, here’s what you should try. We’ve based the following on what Coinbase has told us and some feedback from users, but it’s not guaranteed and we want more feedback. Please let us know how you got on if you tried it or what problems you’ve encountered at firstname.lastname@example.org.
Step 1. Before you can withdraw money, you need to put money IN via a ‘SEPA’ bank transfer. This is the confusing bit – you can put money in using a UK debit or credit card, but you can’t take money out the same way.
So firstly, in order to withdraw money you’ll need to complete a successful deposit to your Coinbase Euro wallet, using what’s known as a ‘SEPA’ transfer. SEPA stands for Single Euro Payments Area and is basically a bank transfer that crosses international borders. Coinbase’s bank is based in Estonia and it doesn’t accept pounds at the moment, which is why a SEPA transfer’s needed.
Coinbase tells us you’ll need to deposit at least six euros for this to work, although we’ve seen at least one page on the app which says a deposit of just one euro is needed.
You can make a SEPA transfer from many normal UK current accounts, but check with your bank how and you’ll likely be charged an extra fee – eg, HSBC charges UK customers £4 for making a SEPA transfer to a non-HSBC account – which you won’t get back. Beware you may also be charged additional fees for currency conversion – or given a poor exchange rate. See our Send Money Abroad guide for more help.
IMPORTANT: Before you do this, you need to get a unique reference number from Coinbase which it will use to verify your bank account. Coinbase will give you this when you opt either to ‘add bank account’ or make a deposit from within the app or site. It’s ESSENTIAL you include this reference number as the payment reference when you initiate the bank transfer, to ensure your deposit goes into your Coinbase account and not someone else’s.
Step 2. Wait for your account to be verified. Coinbase says this takes a few business days after it’s received your deposit, and your account needs to be verified before you can withdraw money. If it’s taking longer than expected, ring Coinbase’s customer support line on +1 (888) 908-7930.
Step 3. Sell your cryptocurrency. Before you can actually take your money out of Coinbase, you’ll need to first sell your Bitcoin, Ether etc within the app or site, and deposit it in your EUR wallet within Coinbase, ie, convert it into euros.
Step 4. Start the withdrawal. Once you’ve done all of the above, to actually withdraw money select your EUR wallet on the left-hand side of the page and then ‘withdraw’ in the top-right.
This will initiate a SEPA transfer back to the account you verified in Step 1 above. Be aware though that in some cases you may face a charge to receive a SEPA transfer as well, so check with your bank first.
Coinbase has recently updated its website with more in-depth instructions on how to make a withdrawal – you can read its updated guidance here.
So… that’s the theory, but now we want to hear from you. Have you successfully withdrawn money from Coinbase? Or have you tried and hit problems? Let us know at email@example.com or in the comments below.