Xapo Bank partnered with Circle to offer USDC deposits and withdrawals in an attempt to bypass the cumbersome and expensive SWIFT payment system
Bitcoin custodian and licensed private bank Xapo Bank partnered with the stablecoin issuer Circle to fully integrate with USDC, allowing its clients to use non-traditional rails in the movement of money globally.
The institution sees USD Coin payment rails as an alternative to SWIFT, with a faster and cheaper money transfer process. The bank’s clients will be able to deposit and withdraw funds from Xapo without fees. The funds will be converted one-to-one from USDC to USD.
As for additional benefits, all USDC deposits will be automatically converted to the dollar, making deposit holders eligible for an annual interest rate return of up to 4.1%, without staking or exposure to the crypto market involved.
Despite recent challenges, connected with the closures of crypto-friendly SVB and Signature Banks, Circle has found a new banking partner – Cross River Bank – recognised for its services to Visa and Coinbase. Therefore, the firm can seamlessly maintain USDC operations, including the new automated settlement.
About the Xapo Bank
Xapo claims its business model differs from traditional banks as it does not take part in lending activities, thus, is not dependent on fractional reserve banking to generate profits. The private bank maintains all customer funds in reserve instead. The institution invests in short-term, highly liquid assets to generate interest for its customers. These include highly credit-rated money market instruments and short-term bonds.
According to the statement, Xapo Bank is a fully licensed and regulated bank. Being a member of the Gibraltar Deposit Guarantee Scheme (GDGS), it protects depositors’ USD deposits up to USD 100,000.
Just recently, Xapo Bank integrated with the Fast Payments system (FPS) to offer zero commission payments 24/7 – 365 in the United Kingdom and Overseas Territories.