Highlights:
- Xapo Bank launches interest-bearing Bitcoin and USD accounts as it expands into the UK
- Xapo Bank provides 24/7 services, allowing UK users to send up to £1 million
- The UK’s robust regulatory framework and dynamic financial environment foster cryptocurrency innovation
After securing a local banking license, Gibraltar-based Xapo Bank has officially entered the UK market. This expansion marks Xapo Bank as the first licensed bank in the UK to offer combined interest-bearing USD and Bitcoin (BTC) accounts.
Advertisement
JUST IN: XAPO BANK REPORTEDLY BECOMES THE FIRST UK BANK TO OFFER INTEREST-BEARING BITCOIN ACCOUNTS
— BSCN Headlines (@BSCNheadlines) August 5, 2024
Xapo Bank Expands UK Services with Interest Accounts
On August 5, Xapo Bank announced its unique service, combining interest-bearing USD and Bitcoin accounts. This move is part of the bank’s plan to expand into the UK, which was made possible by successfully transferring its banking license. Xapo Bank, specializing in cryptocurrency, now allows UK users to hold and earn interest on Bitcoin and USD deposits.
Xapo Bank enables users to send up to £1 million directly to UK-based wallets and bank accounts. These services are available 24/7, providing a high level of convenience. CEO Seamus Rocca expressed pride in successfully passporting the bank’s license into the UK.
Founded in 2013, Xapo Bank evolved from a Bitcoin wallet service to a comprehensive digital retail bank and Virtual Asset Service Provider (VASP) custodian. The bank guarantees USD deposits up to €100,000, offering security comparable to traditional banks.
Innovative Features and Market Access at Xapo Bank
Xapo Bank’s standout feature is its Bitcoin account, offering 1% interest without requiring staking, lending, or asset lockups. Members can use Bitcoin through a universally accepted debit card, invest in S&P 500 stocks, or purchase select cryptocurrencies. The bank also integrates stablecoin payment rails with USD accounts, bridging traditional banking and digital asset services.
Joey Garcia, Director and Head of Regulatory and Public Affairs at Xapo Bank, highlighted the UK’s emergence as a global hub for cryptocurrency innovation. He praised the UK’s robust regulatory framework, dynamic financial environment, and skilled workforce. Garcia also noted that Gibraltar-regulated firms benefit from distinctive market access through the Bank of England’s engagement.
Navigating Challenges in Global Crypto Markets
The UK has positioned itself as a leader in the crypto and blockchain space. The Financial Conduct Authority (FCA) estimated that 10% of UK adults held cryptocurrencies in 2023. Xapo Bank joins other new financial service providers in gaining local authorization from UK regulators. For example, Kraken recently expanded its custody services to UK customers.
Xapo’s UK market debut coincides with a turbulent time in the broader crypto industry. Bitcoin plummeted to $50,000 on Monday, its lowest since February 2024. Other major cryptocurrencies also suffered significant losses. The Bank of Japan’s first interest rate hike in 17 years sparked fear in risk-prone markets, leading to widespread sell-offs.
Additionally, escalating tensions in the Middle East, particularly between Israel and neighboring nations, have added to market unease. Fears of further escalation have led to precautionary measures among concerned countries.
UK’s Crypto Regulations and Market Impact
Garcia emphasized the UK’s potential as a leading center for cryptocurrency innovation. He highlighted the country’s robust regulatory framework, dynamic financial environment, and skilled workforce. Garcia also noted the benefits for Gibraltar-regulated firms through the Bank of England’s engagement.
Progress has been made on the regulatory front. The UK Treasury published final proposals for future crypto regulation, intending to bring crypto asset activities into the financial services regulatory perimeter. However, the crypto policy under the new Labour government and Prime Minister Keir Starmer remains unclear.
In 2021, the FCA banned the sale of derivatives and exchange-traded products to retail investors and introduced new crypto advertising rules, leading some firms to exit the UK market.
Despite these challenges, Xapo Bank’s launch of interest-bearing Bitcoin and fiat accounts marks a significant expansion into the UK, offering a unique mix of traditional and cryptocurrency services. As the UK continues to evolve its regulatory framework, Xapo Bank’s new services highlight the potential for growth and innovation in the crypto industry. Reinforcing the UK’s position as a global hub for cryptocurrency innovation.
Advertisement
