The wait is over: UK residents can now earn interest on both bitcoin and fiat currencies with Xapo Bank.
Xapo Bank has become the first UK bank to offer interest-bearing bitcoin and fiat accounts, following the successful passporting of its banking license into the country. The passporting scheme allows firms from Gibraltar to extend their banking licenses to the UK, facilitated by the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), the Bank of England, and Gibraltar authorities.
Xapo’s platform claims to provide 1% interest on Bitcoin without needing to stake, lend, or lock up assets, although the source of this interest yield remains unspecified. Users can spend bitcoin through Xapo’s debit card, send GBP payments to UK bank accounts, invest in S&P 500 stocks, acquire select cryptocurrencies, and access stablecoin payment rails with USD bank accounts.
Securing UK banking licenses has been challenging for fintech companies in recent years. However, Revolut, a crypto-friendly finance app, recently obtained a new UK banking license. Xapo Bank, regulated by the Gibraltar Financial Services Commission since 2021, could previously offer certain services in the UK but has not been a regulated UK bank until now.
Xapo Bank’s CEO, Seamus Rocca, stated that meeting the UK’s regulatory standards allows them to offer banking services directly to the UK market. He expressed eagerness to expand membership in the UK, helping members diversify their wealth through Bitcoin and secure banking.
Founded in 2013, Xapo has transformed from a Bitcoin wallet into a fully-fledged digital bank and crypto custodian. Combining cutting-edge technology with physical security, the bank offers unique services including guaranteed USD deposits. Recent integration of Bitcoin deposits via the Lightning Network highlights its commitment to innovation.
The UK’s stance on crypto regulation has been evolving. Former Prime Minister Rishi Sunak aimed to position the UK as a global crypto hub, but the current government’s policy still needs to be clarified. Despite this, the country is attracting crypto businesses and investors. While the Financial Conduct Authority has implemented investor protections, the UK is gradually opening up to crypto products, such as exchange-traded notes for professional investors.
