Asides from integrating a USDC payment rail, Xapo Bank recently partnered with Faster Payment System (FPS) to extend its global reach.
Bitcoin custodian and privately licensed bank Xapo Bank is collaborating with Circle to use USDC payment rails as a SWIFT alternative. According to the bank, it has added rails to existing USDC onramps. Consequently, Xapo Bank customers can deposit and withdraw funds instantly using USDC.
According to Xapo Bank CEO, Seamus Rocca, the new feature combines the speed and cost-efficiency of the digital dollar, with the security guarantees of a licensed private bank. He said:
“Enabling auto-converted USDC deposits and withdrawals at Xapo Bank gives crypto members a safe haven for their savings”
How the USDC Payment Rails Will Work
While SWIFT is the global standard for international transactions, the process is cumbersome and costly. However, with the USDC payment rail, Xapo Bank customers will be able to convert USD directly to USDC and transfer the same. The bank is also offering a 1:1 conversion rate from USDC to USD with no extra fees charged.
As a member of the Gibraltar Deposit Guarantee Scheme (GDGS), Xapo Bank guarantees its members’ USD deposits up to $100,000 equivalent. When USDC deposits are made into Xapo Bank, they will be automatically converted into USD. Interestingly, the bank does not participate in staking, lending activities, or fractional reserve banking to generate profits
According to Rocca, this is then invested in money market instruments and short-term bonds, allowing members to earn a 4.1% daily interest. The bank also charges a membership fee of $150 for each customer. These allow the bank to maintain liquidity at all times and pay earned interest to costumes.
Xapo Bank for Faster Payments
Asides from integrating a USDC payment rail, Xapo Bank recently partnered with Faster Payment System (FPS) to extend its global reach. With the FPS integration, Xapo Bank customers will be able to send up to £1m directly from their XApo USD accounts all in real-time.
Similarly, the bank announced a collaboration with Lightspark. By integrating with the Lightning Network, Xapo bank customers can make quick and cost-efficient transfers of up to $100 without any delay.
Despite its successes as a private bank, the bank has further ambitions to offer Wealth Management, and other services like secured lending, and asset protection in the future.
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