Xapo Bank, a leading Bitcoin custodian and licensed private bank, has collaborated with Circle, a global financial technology company helping money move at internet speed, to become the first licensed bank in the world to integrate USDC payment rails as an alternative to SWIFT.
USDC is a digital dollar, also known as a stablecoin, that is a faster and more efficient way to send and receive money around the globe, 24/7 including weekends, in under an hour. By adding outrails to its existing USDC onramps, Xapo Bank is enabling members to bypass costly and time consuming SWIFT payments and instead deposit and withdraw via the stablecoin with no fees charged by Xapo Bank.
The bank is offering a 1:1 conversion rate from USDC to USD. All USDC deposits at Xapo Bank are automatically converted to USD, meaning that members can benefit from a 4.1% annual interest rate return on deposits.
A fully licensed and regulated bank, Xapo Bank is a member of the Gibraltar Deposit Guarantee Scheme (GDGS), meaning that Xapo Bank guarantees its members’ USD deposits up to *$100,000 USD equivalent. Ensuring member protection, Xapo Bank does not engage in staking of any crypto deposits and it does not have any exposure to surrounding crypto markets as all deposits are automatically converted to USD held by the Bank.
Unlike traditional banks, Xapo does not lend and therefore does not rely on fractional reserve banking to make money as its core business model. Instead, Xapo has all its customers’ funds in reserve and invested in short term liquid assets in order to pass the benefit of that interest earned, to its customers.
Seamus Rocca, CEO of Xapo Bank said: “Xapo Bank’s USDC payment rails mark a watershed moment in financial history, combining the speed and cost efficiency of the digital dollar, with the security guarantees of a licensed private bank. Enabling auto converted USDC deposits and withdrawals at Xapo Bank gives crypto members a safe haven for their savings. Running 24/7 including weekends, we eliminate the anxiety of keeping your money in exchanges and the hassle of expensive off ramps into traditional banks.”
“Xapo Bank was built to protect members’ savings. Unlike many traditional banks, we do not offer customer loans and therefore, all of our customers’ money is held dollar for dollar on our balance sheet. It is invested in very short dated, highly credit rated, money market instruments and short term bonds. We are passing that benefit to our customers in the form of a 4.1% interest rate, paid daily.”
“We charge an honest membership fee of $150 USD to our members that helps us recover our overheads and means we don’t have to rely on paying almost no interest to our customers, or use hidden fees to make money. We give the benefit of more than 80% of the yield we generate back to our members.”
Xapo Bank is constantly striving to grow its payment rails options, offering members additional currency choices managed with the security of a fully-regulated Bank. Reflecting this, the USDC news comes after last week’s announcement that Xapo Bank had integrated with the Faster Payment System (FPS) to activate support for GBP settlement for account deposits and withdrawals. The bank also announced an integration with Bitcoin’s Lightning Network, in collaboration with Lightspark, earlier this month.
*Xapo offers 4.1% interest on US dollar deposits, which are protected by the GDGS up to €100,000 EUR (i.e. circa $106,673 at current exchange rates).
To learn more about Xapo Bank visit: https://www.xapo.com/
About Xapo Bank
Xapo Bank is a leading Bitcoin custodian and a fully licensed private bank. Founded in 2013, Xapo became one of the most trusted Bitcoin custodians in the industry, providing users with a secure platform to store and transact with their cryptocurrency. Evolving into Xapo Bank, it became the first crypto company in the world to obtain a banking license and has since expanded its offerings to include Savings accounts. It has future ambitions of offering Wealth Management, and a full suite of private banking services like secured lending, and asset protection among its future ambitions. With this expansion, Xapo is poised to become one of the leading private banks in the world, offering clients a level of security, privacy, and flexibility that is unmatched in the traditional banking industry.
Circle is a global financial technology firm that enables businesses of all sizes to harness the power of digital currencies and public blockchains for payments, commerce and financial applications worldwide. Circle is powering always-on internet-native commerce, payments, and custody and is the issuer of USDC and EUROC. Circle’s open and programmable platform and APIs make it easy for organizations both large and small to run their internet-scale business, whether it is managing their internal treasury, making international payments, or automating supply chains. Learn more at https://circle.com.
About Faster Payments
The Faster Payments Service (FPS) is a secure payments network that allows banks in the UK to send payments faster. It works by allowing banks that are on the network to electronically and securely transfer money between each other, with near-instant availability of funds. It is available 24 hours a day, 365 days a year.
Some of the benefits of FPS include faster processing time for payments, reduced costs and increased customer satisfaction.
About Lightning Network
The Lightning Network is a decentralised network on the Bitcoin blockchain that enables instant, low-cost payments across a network of participants. The Lightning protocol makes use of the security and liquidity of the Bitcoin network to create a secure network of participants who are able to transact bitcoin at high volume and high speed with low cost and instant settlement.