Licensed private bank and bitcoin custodian Xapo has announced a partnership with fintech firm Circle to integrate USDC payments. Xapo is the first licensed bank in the world to add an outrail to an existing USDC driveway. This new feature aims to help members avoid costly and time-consuming SWIFT payments and instead deposit and withdraw via stablecoins. Banks do not charge fees for their services.
Xapo Bank Collaborates With Circle to Integrate USDC Payment Rails
According to the official press release, Xapo offers a 1:1 USDC to USD conversion rate. All stablecoin deposits are automatically converted to USD, allowing bank depositors to benefit from an annual yield of 4.1%.
“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.” – Seamus Rocca, CEO of Xapo Bank.
According to the announcement, Xapo 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. The bank further informed that it is not involved in crypto deposit staking activities nor exposed to the crypto market as all deposits are automatically converted into US dollars held by the bank.
Xapo Bank recently announced integration with the Faster Payment System (FPS), allowing deposits and withdrawals to and from accounts to support GBP processing. The bank partnered with Lightspark earlier this month to power Bitcoin’s Lightning network.
USDC Turmoil
The news comes weeks after USDC was briefly unpegged after being implicated in the collapse of Silicon Valley Bank (SVB) after stablecoin issuer Circle left $3.3 billion of its reserves on it. Circle has returned deposits amid shaken investor confidence, but stablecoins are redeeming at a faster pace.As of March 20, users had $738 million in USDC, according to a report. Over $9 million has been redeemed, while the Circle has used less than $9 million in tokens on the Ethereum blockchain. Subsequent events have slashed USDC’s market cap by about 21% so far this year.
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