Xapo Bank, the SoftBank backed crypto bank is focusing its attentions on India
Which is the link among Japan, India and a British enclave in the south of Spain? The correct answer is Xapo Bank. Recently, the Gibraltar-based cryptocurrency bank backed by SoftBank, DST Global Partners and Ribbit Capital, has announced its expansion to India.
The bank, that combines traditional banking with the utility of Bitcoin and stablecoins, announced that it will begin accepting members across South Asia making its full suite of hybrid banking services and the financial opportunities they present accessible to the world’s largest population and one of the fastest growing fintech market in the world.
The service provided
With its payment rails and comprehensive suite of private banking services, Xapo Bank offers its members a cost-effective pathway to cross-border banking services and wealth-building opportunities. With this move, Xapo Bank aims to empower its members with faster and cheaper options for cross-border transactions, contributing to the industry’s growth and wider adoption.
In march, the bank announced the strategic partnership with Circle to integrate USD Coin USDC payment rails as an alternative to SWIFT. Xapo Bank said that the new feature allows its members to bypass the cumbersome and expensive SWIFT payment system through “outrails” added to its existing USDC on-ramps. By utilizing the USDC stablecoin, members can deposit and withdraw funds from Xapo without fees and benefit from a one-to-one conversion rate from USDC to the U.S. dollar.
One of the attractive features of Xapo Bank for customers in India is its competitive interest rates on deposits. Xapo Bank offers 4.1% annual interest on U.S. dollar deposits and 1% on Bitcoin, with daily payouts in satoshis, according to its website. The bank allows crypto-to-fiat conversions, immediate stablecoin-to-fiat exchanges, and facilitates British pound or euro transfers.
With a population of over 1.3 billion, India represents a huge opportunity for Xapo Bank. The decision to start operations in South Asia comes at a time when India has seen impressive foreign inflows of $15.5 billion in the first quarter of 2023.
The CEO of Xapo Bank, Seamus Rocca, suggested to the media that the absence of conventional banking services in certain parts of South Asia has created a void that Xapo Bank aims to fill.
«We have the opportunity to provide our hybrid banking and investment solutions to its large underserved populations, bridging an important gap in the region’s financial systems and allowing its savvy savers, investors, and professionals the freedom to explore their financial potential with a single mobile application», said Rocca.
Revolutionizing remittances in India
However, Narendra Modi’s government has been cautious with cryptocurrency trading. The world’s most populous country imposes a 30% flat tax on crypto income, a 1% tax deducted at source on trades above 10,000 rupees (US$122), and forbids offsetting losses against gains.
Such regulations could potentially impact Xapo Bank’s operations and profitability in India, but the company remains undeterred, recognizing the immense potential of India’s growing economy and the urgent need for accessible financial services.
Remittances are one big topic in the South-Asia country’s economy due to the population of Indians living abroad who send money back to their families. That was exacerbated by the coronavirus pandemic, accelerating the adoption of crypto-based remittance services, much cheaper than other providers. However, today stablecoins are now increasingly used as a form of cross-border payment.
Capitalizing on this trend, Xapo Bank said stablecoins offer users in India the benefits of crypto for remittances, including speed, lower fees and reduced price volatility compared to conventional methods, enabling Xapo members to transfer funds instantly, globally and 24/7 via its mobile app.