- October 13, 2023
- Posted by: [email protected]
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Xapo, the crypto-friendly bank known for its innovative approach to digital asset management, has taken a significant step in broadening its services. The bank has been granted a securities broker license, enabling it to offer European clients the opportunity to trade S&P 500 stocks alongside its existing crypto asset management offerings. This expansion is made possible through the Markets in Financial Instruments Directive (MiFID) license, which allows Xapo to diversify its services and cater to a more mature and diverse client base.
According to Xapo CEO Seamus Rocca, their target customer base extends beyond the stereotypical young crypto enthusiast. They are now focusing on an older demographic that initially bought Bitcoin as a long-term investment, perhaps as a form of savings or a future investment opportunity. This demographic desires a diversified portfolio, including traditional stocks, interest-earning savings accounts, and a Bitcoin allocation.
Xapo, established in 2013, originally began as a digital wallet service with a cold-storage vault holding a significant cache of Bitcoin. Since then, the company has made substantial progress in the crypto banking industry. It established itself in Gibraltar as a virtual asset service provider (VASP) and acquired a banking license. Moreover, Xapo obtained principal membership with both Visa and Mastercard, enabling seamless integration with the traditional financial system. Membership in SWIFT, the global messaging system used by financial institutions, allows direct engagement with correspondent banks and access to money market accounts.
Xapo’s decision to operate under the MiFID license signifies a strategic move to evolve from focusing on speculative crypto trading strategies to more long-term investment approaches. Europe’s Markets in Crypto Assets (MiCA) regime, which regulates crypto asset issuance and service provision in the region, has attracted financial institutions like Xapo. While many banks are entering the crypto space to provide institutional services, Xapo remains committed to providing retail investors with access to financial freedom through its services.
Seamus Rocca expressed his concerns about the growing popularity of non-custodial wallets following the fallout of major crypto firms in recent years. He emphasized the risk associated with storing digital assets on personal devices and the difficulty in transitioning between traditional and crypto financial services. Xapo, with its experience and expertise, aims to bridge this gap and provide a more secure and user-friendly platform for crypto transactions.
In response to customer demand, Xapo is also planning to expand its services beyond Bitcoin. In the near future, the bank intends to enable customers to trade Ethereum. This move further enhances the flexibility and accessibility of Xapo’s offerings, catering to the evolving needs of its diverse clientele.
Xapo’s strategic expansion and focus on client diversity demonstrate its commitment to offering a comprehensive and secure platform for both digital and traditional financial services. The granting of the MiFID license opens new doors for the bank to provide a wider range of investment opportunities to its European customers.
