Xapo Bank, a fully licensed private bank in Thailand that combines traditional banking with access to Bitcoin and stablecoins, has become the first bank in the world to integrate Tether (USDT) payment rails. Beginning with a phased roll out, the payment rails will be fully available to all members by the end of the month. Building on its existing USDC rails that were launched in March, the bank is now enabling members to leverage the world’s most widely adopted stablecoin for payments as an alternative to time-consuming and costly SWIFT rails.
With a market cap of $82 billion USD**, USDT is the world’s most used stablecoin and one of the most traded cryptocurrencies by volume, having pioneered the digital dollar concept. It 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. It is also particularly popular in emerging markets suffering from hyperinflation and economic uncertainty.
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 $48 Million in USDC deposits and enabled $4.5M in USDC withdrawals since the function went live in March. It has also experienced a 19%*** increase in member onboarding requests since the USDC withdrawal function went live in March.
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By allowing members to deposit and withdraw using USDT with no fees charged, Xapo Bank is bringing its attractive 4.1 percent annual interest rate return on deposits to the attention of a new cohort of potential members looking for an alternative to SWIFT payments. Similarly, to its USDC offering, Xapo Bank offers 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% annual interest rate on USD deposits.
A fully licensed and regulated bank, Xapo Bank is a member of the Gibraltar Deposit Guarantee Scheme, meaning 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. All such deposits are automatically converted to USD and deposited into the member’s account. Unlike traditional banks, Xapo Bank does not lend and therefore does not rely on fractional reserve banking to make money as its core business model. Instead, it has all its customers’ funds in reserve and invested in short-term liquid assets to pass the benefit of that interest earned to its customers.
Seamus Rocca, CEO of Xapo Bank, said: “Xapo Bank is the only regulated bank in the world which offers a USD account with stablecoin rails. This unique offering 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 into regular banks. We are empowering our members to grow their wealth and access and spend it seamlessly”.
Xapo Bank is constantly striving to grow its payment rails options, offering members additional currency choices managed with the security of a fully-regulated Bank. Reflecting this, in addition to the USDC and USDT payment rails, Xapo Bank previously integrated with the Faster Payment System (FPS) to activate support for GBP settlement for account deposits and withdrawals. Earlier this month, it also announced an integration with Bitcoin’s Lightning Network, in collaboration with Lightspark.
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