Xapo Bank Integrates USDC Payment Rails As An Alternative To SWIFT

Mar. 23, 2023
Xapo Bank Integrates USDC Payment Rails As An Alternative To SWIFT

Xapo Bank, a licensed private bank and Bitcoin custodian has teamed up with Circle to integrate USDC payment rails, making it the first fully licensed Bank to offer this service, according to March 22nd report.

USDC is a stablecoin or digital dollar that provides faster and more efficient transactions around the globe, including weekends, in less than an hour.

By adding this payment rail to its existing USDC onramps, Xapo Bank enables its members to deposit and withdraw funds without relying on costly and time-consuming SWIFT payments, with no fees charged by Xapo Bank.

The Benefits Of Xapo Bank’s USDC Payment Rails

Xapo Bank offers a 1:1 conversion rate from USDC to USD, automatically converting all USDC deposits to USD. This means members can benefit from a 4.1% annual interest rate return on deposits.

Xapo Bank is a fully licensed and regulated bank and a member of the Gibraltar Deposit Guarantee Scheme (GDGS), which ensures member protection for up to USD 100,000 equivalent.

Xapo Bank does not engage in staking crypto deposits or has any exposure to crypto markets. And all deposits are automatically converted to USD held by the Bank.

Instead of using fractional reserve banking to generate revenue, Xapo Bank is unlike other banks. The Bank, on the other hand, makes investments in short-term liquid assets and distributes the interest to its clients.

Xapo Bank CEO Seamus Rocca stated:

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.

Moreover, Rocca said enabling auto-converted USDC deposits and withdrawals at Xapo Bank gives crypto members a safe haven for their savings.

Xapo Bank’s Growing Payment Rails Options

Xapo Bank aims to grow its payment rails options, offering members additional currency choices managed with the security of a fully-regulated bank.

Thus, Xapo Bank’s announcement from last week that it had integrated with the Faster Payment System (FPS). In addition, it enables support for GBP settlement for account deposits and withdrawals reflected in this.

Furthermore, the Bank announced an integration with Bitcoin’s Lightning Network earlier this month in collaboration with Lightspark.

In conclusion, Xapo Bank’s integration of USDC payment rails gives its members faster and more efficient transaction options. It eliminates the anxiety of keeping money in exchanges and the hassle of expensive off-ramps into traditional banks.

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The Bank holds all customers’ money dollar for dollar on its balance sheet. It invests in short-dated, highly credit-rated money market instruments and short-term bonds, ensuring a transparent business model.

Xapo Bank’s USDC payment rails mark a significant milestone in the financial industry, where speed, security, and cost efficiency are paramount for financial transactions.

Ammar Raza

Associate editor
Skilled in crafting compelling content, with a deep enthusiasm for blockchain technology. I offer precise and easily comprehensible perspectives on cryptocurrencies, decentralized finance, and the ever-evolving landscape. Count on me as a reliable resource to remain informed about the latest advancements in the world of crypto.