Xapo Bank to enable USDC deposits and withdrawals
Bitcoin custodian and licensed private bank Xapo Bank has partnered with financial technology company Circle to integrate USD Coin (USDC) payment rails as an alternative to SWIFT. Payment rails refer to the infrastructure and technology used to facilitate the movement of funds between parties in a financial transaction. Payment rails come in many forms, including traditional bank wires, credit card networks, and blockchain-based platforms.
We are pleased to be the first bank in the world to fully integrate with USDC, enabling our members to send and receive USDC from their US Dollar accounts, no fees charged. More: https://t.co/ep3wx0vLLn#XapoPrivateBank pic.twitter.com/Obed371oiT
Xapo Bank shared that the new feature allows its members to bypass the cumbersome and expensive SWIFT payment system through outrails added to its existing USDC onramps. By utilizing the USDC stablecoin, members can deposit and withdraw funds from Xapo without fees and benefit from a one-to-one conversion rate from USDC to the U.S. dollar. In addition, all USDC deposits are automatically converted to the dollar, which enables members to earn an annual interest rate return of up to 4.1%.
According to the announcement, Xapo Bank is a fully licensed and regulated bank and a member of the Gibraltar Deposit Guarantee Scheme (GDGS), which protects depositors' dollar deposits up to $100,000. Additionally, Xapo Bank shared that it does not engage in the staking of any cryptocurrency deposits, and all deposits are automatically converted to the dollar upon receipt by the bank. Xapo claims this reduces exposure to any risks associated with the fluctuating crypto markets.
Xapo claims its business model differs from traditional banks as it does not engage in
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