Question 1

What is Xapo Bank?

Accepted Answer

Xapo Bank is a Gibraltar-based digital bank that uniquely combines traditional banking with Bitcoin services, operating under UK regulatory oversight. Founded in 2013 as a Bitcoin wallet service, Xapo evolved into a fully licensed bank offering both fiat currency (US dollar) accounts and Bitcoin accounts within a single regulated banking platform. The bank serves customers globally, excluding the United States, and has expanded into the UK market where it became the first licensed bank to offer interest-bearing Bitcoin and fiat accounts. Xapo specialises in providing secure cryptocurrency custody alongside conventional banking services.

Question 2

When was Xapo Bank founded?

Accepted Answer

Xapo Bank was founded in late 2013 by Wences Casares and COO Federico Murrone. Casares, an Argentine entrepreneur who previously founded online brokerage Patagon (sold to Banco Santander for $750 million), created Xapo after becoming interested in Bitcoin as a solution to Argentina's financial instability. In 2011, Casares purchased his first bitcoins but couldn't find secure storage, so he built a vault for personal use. When friends and financial institutions requested access to his vault, this became the foundation for Xapo.

The company opened to the public in March 2014, initially offering Bitcoin wallet services and introducing a Bitcoin-backed debit card in April 2014. In July 2017, Xapo received a European e-money licence in Gibraltar. In May 2015, the company moved its headquarters from Palo Alto, California to Zug, Switzerland, before later establishing its primary base in Gibraltar. The bank has been regulated by the Gibraltar Financial Services Commission since 2021, and in August 2024, successfully passported its banking licence into the UK market.

Question 3

Where is Xapo Bank headquartered?

Accepted Answer

Xapo Bank is headquartered in Gibraltar, a British Overseas Territory at the southern tip of the Iberian Peninsula. Gibraltar's regulatory framework allows the bank to operate under the Gibraltar Financial Services Commission while also enabling it to passport its banking licence into the United Kingdom, providing access to both markets under coordinated regulatory oversight.

Question 4

Where does Xapo Bank operate?

Accepted Answer

Xapo Bank operates globally with services available in the United Kingdom and numerous countries worldwide, excluding the United States. Following the successful passporting of its Gibraltar banking licence in August 2024, Xapo gained full regulatory recognition in the UK under oversight from the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), and the Bank of England. The bank's digital-first model allows it to serve customers internationally through its mobile app and online platforms, with particular focus on clients seeking combined cryptocurrency and traditional banking services.

Question 5

What services does Xapo Bank offer?

Accepted Answer

Xapo Bank provides a unique combination of traditional and cryptocurrency banking services. Customers can hold both US dollars and Bitcoin in unified accounts, with the ability to switch between the two. The bank pays 0.5% annual interest on Bitcoin balances up to 5 BTC and 3.6% APR on US dollar deposits, with interest paid daily in Bitcoin using yields from short-term US treasury bonds.

The Xapo debit card allows customers to spend from either USD or Bitcoin balances with no foreign exchange fees, earning up to 1% cashback in Bitcoin on purchases. The bank offers Bitcoin-backed loans up to $1 million USD, with flexible loan-to-value ratios from 20% to 40%, enabling customers to access liquidity without selling their cryptocurrency holdings. Additional services include buying and selling Bitcoin with low fees, sending funds up to £1 million, making payments to UK-based wallets and bank accounts, investing in S&P 500 stocks, and accessing stablecoin payment rails via USD accounts.

Xapo employs multi-party computation (MPC) technology alongside physical vault security for cryptocurrency custody. USD deposits are protected up to €100,000, and the bank maintains SOC 2 Type II and PCI-DSS security certifications with regular audits.

Question 6

What makes Xapo Bank unique?

Accepted Answer

Xapo Bank is the first and only licensed bank in the United Kingdom to offer combined interest-bearing Bitcoin and fiat currency accounts, representing a groundbreaking integration of cryptocurrency and traditional banking. The bank bridges the gap between the digital asset world and conventional finance, allowing customers to spend Bitcoin "like fiat" through a universally accepted debit card while maintaining full banking regulation and deposit protections.

Unlike cryptocurrency exchanges or fintech apps, Xapo operates as a fully regulated bank with oversight from multiple authorities including Gibraltar's Financial Services Commission, the UK's FCA and PRA, and the Bank of England. The bank's use of multi-party computation technology for secure cryptocurrency storage, combined with physical vault protection, provides institutional-grade security. Xapo's ability to offer Bitcoin-backed loans creates unique financial flexibility, enabling customers to access capital while maintaining cryptocurrency exposure. In May 2024, Xapo partnered with Lightspark to enable Bitcoin deposits via the Lightning Network, further enhancing its technological capabilities.

Question 7

What type of financial institution is Xapo Bank?

Accepted Answer

Xapo Bank is a licensed digital bank and virtual asset service provider (VASP) operating under a Gibraltar banking licence. In the UK, the bank operates through a passporting mechanism that allows Gibraltar-based firms to extend their banking licences with coordinated oversight from UK regulators including the Financial Conduct Authority, Prudential Regulation Authority, and the Bank of England, alongside Gibraltar authorities. Xapo functions as a retail bank specialising in digital-first services that integrate cryptocurrency custody and trading with traditional banking operations. It is classified as both a bank and a VASP, making it a hybrid institution uniquely positioned at the intersection of traditional finance and the cryptocurrency ecosystem.

Xapo Bank

in the United Kingdom 🇬🇧

Crypto-Friendliness

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About Xapo Bank in the United Kingdom