To offer alternative financial services in emerging market nations, crypto pioneer Xapo bank has quietly gathered interest-bearing, deposit-guaranteed USD bank accounts.
A new tool has been added to the arsenal of Xapo Bank’s Gibraltar-licensed private bank and cryptocurrency custodian with the integration of the Bitcoin-based Lightning Network and a partnership with Lightspark, the project led by David Marcus, a former Facebook crypto head.
According to a press release, customers of Xapo Bank can now instantly pay for minor transactions up to $100 at any merchant accepting Lightning payments without having to pay large transaction fees or wait a long time for blockchain confirmation.
Also, as Xapo has been attempting to do, the integration will close the gap between conventional finance and cryptocurrencies. The Xapo Bank platform currently offers a 4.1% annual interest rate on U.S. dollars in accounts with a $100,000 deposit guarantee and shortly plans to increase that rate to 1% on Bitcoin.
Given the present regulatory pressure on cryptocurrency exchanges, yield-generating products, and stablecoins, this is especially crucial. Yet, it’s also about carrying out a long-term strategy to offer alternative banking options in developing nations, according to Xapo CEO Seamus Rocca in an interview with CoinDesk.
Back in 2013, Xapo started out with a wallet, a cold-storage custody vault, and a reserve of 30,000 BTC. Later, Xapo established itself in Gibraltar using its framework for virtual asset service providers. According to Rocca, Xapo decided to sell its institutional business to Coinbase in 2017 so that it could concentrate on the retail market while staying true to the original spirit of Bitcoin, which was financial independence.
Xapo has received a banking license, primary membership in Visa and Mastercard, and SWIFT membership since starting the process in 2019. As a result, the company has access to money market accounts and can communicate with correspondent banks directly rather than through payment processors or other third parties.
Rocca stated, “We are now a fully-fledged bank with a USD bank account, which we think is most attractive to emerging countries. “If you consider the U.S. and regions like Europe, people mostly view cryptocurrencies as a sort of gambling. Bitcoin can change people’s life in contrast to countries like Argentina, Venezuela, Lebanon, and Nigeria where currencies depreciate and hyperinflation is a possibility.
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