Coinfloor, a UK-based bitcoin exchange, has announced that it will be adopting zero fee trading and replace trading fees with percentage fees (besides bank processing fees) on GBP and other fiat deposits and withdrawals.

According to the official announcement, bitcoin deposits will be free and bitcoin withdrawals will be charged a flat 0.0005 XBT fee to cover fees charged by the bitcoin network.

“Zero fee trading will go live later this week and fiat deposit and withdrawal percentage fees will go live early next week”, Coinfloor said. “We are already the most liquid GBP/XBT exchange but we believe this change will increase trade volumes and improve liquidity even further.”

The exchange further explained that for regular buyers or sellers on Coinfloor, their overall costs (i.e. deposit/withdrawal costs and trading costs) would stay roughly the same initially. However, it expects that their percentage costs will reduce over time as liquidity improves due to the change.

Furthermore, regular traders on Coinfloor Exchange would now be able to trade bitcoin for free, not paying fees other than as part of any occasional deposits or withdrawals. Also, if a user is depositing, trading and withdrawing profits in XBT, they will only pay the nominal XBT withdrawal fees.

However, Coinfloor clarified that it will monitor this change and would go back to traditional fee structure if the need arises. It said:

“We are confident that zero fee trading will be a net benefit to traders, non traders and Coinfloor. However, this is a significant and unprecedented change so we will be monitoring how it performs and if necessary, we will revert to a more traditional trading fee based structure.”