The privatized Xapo Bank, a Bitcoin custodian, has partnered with the fintech company Circle to introduce USD Coin payment rails as an alternative option instead of SWIFT.
This integration provides a reliable, and secure payment solution, utilizing the technology and infrastructure required to transfer funds between parties in a financial transaction, including the use of credit cards, general bank wires, and even blockchain-driven platforms.
Perks of this Collaboration
Xapo Bank has even declared that this feature will permit its members to bypass the expensive and bulky SWIFT payment system with extended USDC on-ramps. Through the use of the USDC stablecoin, Xapo users can deposit and withdraw funds without any cost and receive an exact one-to-one exchange rate from the USDC to the USD.
Furthermore, all USDC deposits are immediately transformed to the dollar, allowing members to gain an annual interest rate return of up to 4.1%.
Xapo Bank is a licensed and regulated financial institution and a proud member of the Gibraltar Deposit Guarantee Scheme (GDGS). Under this scheme, USD deposits of up to $100,000 can be safeguarded. To minimize the risk associated with the crypto market volatility, Xapo Bank does not partake in staking any crypto deposits, and all deposits are immediately converted to USD upon receipt.
SWIFT Announces Launch of Digital Currency Project
SWIFT has declared the successful completion of its API-based Central Bank Digital Currency (CBDC) project following a 12-week sandbox testing period. During this period, 18 banks collaborated to simulate almost 5,000 transactions between two blockchain networks and traditional fiat-based payment systems. The results of the test were promising, showcasing a smooth exchange of CBDCs across different platforms.
Central and commercial banks have the opportunity to evaluate the solution, trial its capabilities, and measure its efficiency to support its development through this sandbox testing environment. In the upcoming months, central banks will have access to the beta version of the framework, allowing them to carry out some additional testing.