Circle Skip SWIFT To Choose Xapo Bank As New Partner To Convert USDC
- Xapo Bank will become Circle’s new partner to provide USDC conversion service.
- This partnership will allow users to skip costly and time-consuming SWIFT payments and deposit and withdraw via stablecoins without being charged fees by Xapo Bank.
- Xapo Bank is a Gibraltar Deposit Guarantee Scheme (GDGS) member.
- All USDC deposits at Xapo Bank are automatically converted to USD and can benefit from a 4.1% annual interest yield on deposits.
Gibraltar-based Xapo Bank recently announced that it would partner with stablecoin issuer Circle to provide members with an alternative to traditional banking payment systems using USDC.
According to the announcement, the partnership will allow users to bypass costly and time-consuming SWIFT payments and instead deposit and withdraw via stablecoins without being charged a fee by Xapo Bank.
As a member of the Gibraltar Deposit Guarantee Scheme (GDGS), Xapo Bank, a fully licensed and regulated bank, is able to guarantee its members’ USD deposits up to $100,000 equivalent. Because all warranties are automatically converted to USD held by the Bank, Xapo Bank does not stake any cryptocurrency deposits and has no exposure to nearby cryptocurrency markets.
Xapo Bank will offer a one-to-one dollar conversion of USDC, with all USDC deposits being converted into USD. Additionally, the bank will provide a 4.1% annual interest rate on deposits.
Currently, SWIFT is the system institutions use worldwide for global bank-to-bank payments and transfers. However, Xapo Bank assures its members that it refrains from lending or fractional reserve banking practices and holds customer funds in reserves and short-term liquid assets. Finally, Xapo Bank charges $150 for overhead expenses.
“We charge an honest membership fee of $150 to our members that helps us recover our overheads and means we don’t have to rely on paying almost no interest to our customers, or use hidden fees to make money. We give the benefit of more than 80% of the yield we generate back to our members.”
Before that, USDC was the most affected stablecoin following the collapse of the world’s 16th largest bank Silicon Valley Bank (SVB) when it claimed to have $3.3 billion in reserves on it.
The stablecoin has now recovered to dollar parity after Circle’s CEO, Jeremy Allaire, said on Twitter that all of the company’s SVB-related deposits are secured.
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