Issuer of stablecoin USDC has announced a partnership with licensed bank Xapo. The partnership results in the integration of so-called payment rails to support the movement and conversion of the popular stablecoin into dollars.
USDC’s foundations are getting stronger
Xapo Bank has announced the launch of a groundbreaking feature that makes it the first bank in the world to allow depositing and withdrawing money via USDC. With the new feature, the bank’s customers will be able to bypass costly and time-consuming SWIFT payments. The bank will not charge any fees for the service. Deposits and withdrawals will be made automatically, and deposits will be converted to US dollars at a rate of 1:1.
Xapo Bank CEO Seamus Rocca called the introduction of the new feature “a landmark moment in the history of finance.” By automatically converting stablecoin deposits to USD, the bank’s depositors will be able to benefit from a 4.1% annual rate of return. In addition, operating 24/7, including weekends, the bank will provide a safe haven for savings, eliminating the anxiety of storing money on exchanges and the hassle of expensive ramps to traditional banks.
Xapo is also using the Bitcoin Lightning Network
Xapo Bank recently announced full support for British pound settlement through integration with the Faster Payment System (FPS), as well as the use of the Bitcoin Lightning Network.
An important part of the announcement is that Xapo is a member of the Gibraltar Deposit Guarantee Scheme (GDGS), which protects funds up to $100,000. In addition, the bank clarified that it has no staking activities or exposure to cryptocurrency markets, as all deposits are automatically converted to cash held by the bank.
Seamus Rocca, CEO of Xapo Bank, stressed that the introduction of the new services is a step toward providing a safe haven for customer savings. Integration with FPS will allow faster and more convenient settlements, and the use of Lightning Network will enable more efficient cryptocurrency transactions.
Turmoil around USDC results in development
Recent weeks have brought a lot of tension to the stablecoin world. Particularly for USDC, which has experienced troubles related to the collapse of Silicon Valley Bank (SVB). The stablecoin issuer, Circle, had deposited $3.3 billion of its reserves there. Although Circle recovered its funds, investors lost confidence in USDC and began disposing of it at a higher rate. On March 20, they redeemed more than $738 million in USDC, while Circle, on the Ethereum blockchain, issued less than $9 million of the token. These events have significantly reduced USDC’s market capitalization, which has fallen nearly 21% this year.