Xapo, a digital asset bank based in Gibraltar, has successfully obtained an EU securities broker license. This move will enable European customers to trade major S&P 500 stocks like Amazon in conjunction with Xapo’s existing crypto wealth management services.
Xapo CEO Seamus Rocca emphasised the company’s shift towards long-term investing, distancing it from the speculative nature commonly associated with crypto trading.
Rocca emphasised that this move will help solidify the bank’s target customer base as an older demographic, compared to the “stereotypical 25-year-old Gen Z, who wants to trade crypto”.
Evolution of Xapo
Xapo was established in 2013 and started its journey by offering a digital wallet and a cold-storage custody vault, boasting a reserve of 30,000 Bitcoin ($BTC).
The firm later expanded its operations in Gibraltar, leveraging the region’s virtual asset service provider (VASP) framework.
The past four years have seen significant regulatory advancements for Xapo. Since initiating its regulatory pursuits in 2019, the firm now holds a banking license and secured principal memberships with international payment giants, Visa and Mastercard.
A notable milestone was Xapo’s integration into the SWIFT network, which facilitates direct global banking interactions, bypassing third-party intermediaries.
Reflecting on Xapo’s customer base, Rocca said: “Our target customer is not your stereotypical 25-year-old Gen Z, who wants to trade crypto. It’s a slightly older demographic who bought Bitcoin a few years ago to hold and to be like a pension pot, or perhaps to buy a property when the price is right.”
He added: “They want a diversified portfolio perhaps with some stocks, a savings account that earns interest, as well as a Bitcoin allocation.”
Xapo’s crypto achievements
Xapo has made significant advancements into the crypto space. Earlier this year, Xapo entered a partnership with startup Lightspark, led by former Facebook crypto head David Marcus. The collaboration focused on integrating the Lightning Network to expedite Bitcoin transactions for its users.
With this integration, Xapo Bank members could execute small transactions, up to $100 USD, with any merchant that accepts Lightning payments. This method bypasses high transaction fees and long blockchain confirmation wait times.
Xapo was the first licensed private bank to partner with Lightspark and introduce this efficient payment service.
The digital bank later became the first regulated bank to offer a USD account with stablecoin functionality. This allowed its users to utilise Tether, the largest stablecoin, for their transactions.
“This is a unique offering that combines the compliance and safety of a traditional bank, with the speed, efficiency and breadth of use of USDT,” Rocca said.
He added: “By growing our payment rail options, we are committed to eliminating the timely and often expensive deposit and withdrawal processes into regular banks. We are empowering our members to grow their wealth and access and spend it in a seamless manner.”