Circle Partners with Xapo Bank to Facilitate USDC-to-USD Conversions

Xapo Bank, based in Gibraltar, will become the first licensed bank to offer USDC-to-USD conversion services in partnership with Circle.

Circle Collaborates with Xapo Bank for USDC-to-USD Conversions

According to the announcement, Xapo Bank will provide a 1:1 conversion rate from USDC to USD. All USDC deposits at Xapo Bank will be automatically converted to USD, with customers earning an annual interest rate of 4.1%.

To safeguard depositors, Xapo Bank commits to not participating in staking or engaging with any crypto platforms. Additionally, the bank operates 24/7, including weekends, so there will be no delays or disruptions typical of traditional banks.

Moreover, Xapo Bank will not charge transaction fees for USDC, a significant advantage compared to the costly and time-consuming SWIFT network used by international banks.

Xapo Bank is part of the Gibraltar Deposit Guarantee Scheme, which is managed in Gibraltar. Earlier this month, the bank announced its integration of Bitcoin’s Lightning Network and Lightspark into its system.

Regarding USDC, the stablecoin has seen a 15% drop in market capitalization over the past month. USDC experienced a severe depeg, falling to $0.87 following the collapse of Silicon Valley Bank. Although it quickly recovered to the $1 mark, it has somewhat eroded investor confidence.

Circle has pledged to recover the entire $3.3 billion trapped at the bank and issue an additional $0.7 billion in USDC. Meanwhile, the largest stablecoin on the market, USDT, continues to expand aggressively, minting an additional $5 billion USDT in the past week.