Xapo Bank has made history by becoming the first licensed bank in the United Kingdom to offer an interest-bearing account that combines both USD and Bitcoin (BTC). This milestone is part of the bank’s expansion into the UK, facilitated by the successful passporting of its banking license, as reported by Finance Magnates.
Xapo Bank’s Unique Offering
Xapo Bank, a digital banking institution licensed in Gibraltar and specializing in cryptocurrency, is now offering UK users a unique financial product. The new account allows users to send up to £1 million GBP directly to UK-based wallets and bank accounts, with services available 24/7.
“We’re proud to announce we have successfully passported our banking license into the UK,” said Seamus Rocca, CEO of Xapo Bank. “This means we are allowed to offer our banking services directly to the UK market. Achieving this is no easy feat and shows we meet the UK’s high regulatory standards.”
Founded in 2013, Xapo Bank has 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 the equivalent of €100,000, offering a security level comparable to traditional banking institutions.
A standout feature of Xapo Bank’s offerings is a Bitcoin account that provides 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. Additionally, the bank integrates stablecoin payment rails with USD bank accounts, effectively bridging traditional banking and digital asset services.
“The UK is swiftly emerging as a global hub for cryptocurrency innovation, boasting a promising regulatory framework, a dynamic financial ecosystem, and a talent-rich environment,” said Joey Garcia, Director and Head of Regulatory and Public Affairs at Xapo Bank.
Crypto Market in Turmoil
Xapo’s successful entry into the UK market comes at a tumultuous time for the broader cryptocurrency industry. On Monday, Bitcoin plummeted to $50,000, marking its lowest level since February 2024. Other major cryptocurrencies also suffered significant losses, with Ethereum (ETH), Binance Coin (BNB), Cardano (ADA), and Solana (SOL) all declining by around 15% over the past day.
Recent reports indicate digital asset investment products saw outflows amounting to $528 million last week, marking the first downturn in four weeks. This exodus is believed to be a response to mounting concerns over a potential recession in the United States, compounded by geopolitical uncertainties and consequent widespread liquidations across various asset classes.
The Bank of Japan’s (BOJ) decision to raise interest rates for the first time in 17 years due to concerns over the Yen’s purchasing power decline against the US Dollar has triggered apprehension within risk-on asset markets, prompting widespread sell-offs. Additionally, escalating tensions in the Middle East, particularly between Israel and neighboring nations, have added to the prevailing market unease, with fears of further escalation prompting precautionary measures among concerned countries.
Xapo Bank’s innovative product offerings could provide some stability and new opportunities for investors navigating the current volatile crypto landscape.
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