USDC Issuer Circle Taps Xapo Bank to Replace SWIFT Payments
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Circle, the company behind the USDC stablecoin, has picked Xapo as its banking partner to bypass costly and time-consuming SWIFT payments.

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Xapo said in a press release it has become the first licensed bank to integrate USDC payment rails as an alternative to SWIFT. The Gibraltar-based bank will offer a 1:1 conversion rate from USDC to USD. Xapo added:

"All USDC deposits at Xapo Bank are automatically converted to USD, meaning that members can benefit from a 4.1% annual interest rate return on deposits."

Custody Service Xapo Will Cease to Operate in the US

Xapo pointed out that unlike traditional banks, it doesn't lend its assets and doesn't rely on "fractional reserve." Instead, Xapo invests in short-term, highly credit rated, money market instruments as well as short-term bonds.

Circle changes its banking partner after Silicon Valley Bank — where the company held over $3 billion of USDC's reserves — wound down its operations. After that, Circle Internet Financial expanded its relationship with Bank of New York Mellon Corp as primary custodian for its reserves of USDC.

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