Financial news

Xapo Bank, a fully licensed private bank that combines traditional banking with access to Bitcoin and stablecoins, has become the first licensed bank in the world to integrate Tether payment rails for retail customers.

Beginning with a phased rollout, the asset-backed cryptocurrency stablecoin Tether payment rails will become fully available to all members by the end of May. Building on its existing USDC rails (launched in March), Xapo Bank is now enabling members to leverage the world’s most widely adopted stablecoin for payments as an alternative to more costly SWIFT rails.

Xapo Bank has seen a strong appetite for the efficiency of stablecoin deposits and withdrawals amongst its members, many of whom are based in emerging markets. Since enabling USDC deposits in November it has received $48million in USDC deposits and enabled $4.5million in USDC withdrawals since the function went live in March. It has also experienced a 19 per cent increase in member onboarding requests since the USDC withdrawal function went live in March.

With a market cap of $82billion, USDT is currently the world’s most-used stablecoin. It is also one of the most traded cryptocurrencies by volume, having pioneered the ‘digital dollar‘ concept. USDT empowers growing ventures and innovation throughout the blockchain space, providing a quicker and more efficient way for millions of people across the globe to send and receive money for remittances and other payments. The stablecoin has also proved to be particularly popular in emerging markets that are suffering from hyperinflation and economic uncertainty.

‘Eliminating timely and expensive deposit and withdrawal processes in regular banks’

By enabling members to deposit and withdraw using USDT with no fees charged, Xapo Bank offers a 4.1 per cent annual interest rate return on deposits to the attention of a new cohort of potential members who are looking for an alternative to SWIFT payments. Similarly to its USDC offering, Xapo Bank is offering a 1:1 conversion rate from USDT to USD. All USDT deposits received by Xapo Bank are automatically converted to USD, meaning that members can benefit from a 4.1 per cent annual interest rate on USD deposits.

Xapo Bank is also a member of the Gibraltar Deposit Guarantee Scheme, ensuring that Xapo Bank guarantees its members’ USD deposits up to the US dollar equivalent of €100,000. Xapo Bank does not take any risks with deposits received using USDT.

Seamus Rocca, CEO of Xapo Bank, explained the importance of expanding the number of payment rail options for customers : “Xapo Bank is the only regulated bank in the world which offers a USD account with stablecoin rails. This is a unique offering that combines the compliance and safety of a traditional bank, with the speed, efficiency and breadth of use of USDT.

“By growing our payment rail options, we are committed to eliminating the timely and often expensive deposit and withdrawal processes in regular banks. We are also empowering our members to grow their wealth and access and spend it in a seamless manner.”