Xapo Bank has officially entered the UK market, becoming the first and only licensed bank in the country to offer interest-bearing USD and Bitcoin accounts after successfully passporting its banking license from Gibraltar.

The passporting scheme, facilitated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), allows Gibraltar-based firms like Xapo to extend their banking licenses to the UK.

Seamus Rocca, CEO of Xapo Bank, emphasized that obtaining the UK banking license reflects their commitment to high regulatory standards.

Xapo offers a 1% interest yield on Bitcoin accounts without requiring users to stake, lend, or lock up their assets, although the source of this yield remains undisclosed.

Customers can utilize Xapo's debit card to spend Bitcoin like fiat currency, send GBP payments to UK bank accounts, and access various financial services including investing in S&P 500 stocks and acquiring select cryptocurrencies.

Xapo allows customers to transfer up to £1 million (approximately $1.275 million) to UK wallets and bank accounts, enhancing its service offerings.

In addition to Bitcoin accounts, Xapo provides access to other financial services, including stablecoin payment options for its USD bank accounts.

Despite recent regulatory changes and challenges in the UK market, Xapo's successful license acquisition demonstrates compliance with local standards.

Joey Garcia, Xapo's director of regulatory and public affairs, highlighted the UK as a growing hub for cryptocurrency innovation, supported by a favorable regulatory framework.

The UK's Financial Conduct Authority reported that approximately 10% of adults in the country held cryptocurrencies in 2023, indicating a significant market potential.

As the regulatory landscape for cryptocurrency in the UK evolves, the government is working towards establishing a clearer framework for crypto firms.