Reports Show Crypto Custodian Xapo Set to be a Digital Bank in Gibraltar

According to a recent report, the cryptocurrency custodian Xapo is getting ready to become a “fully-fledged” bank in the British Overseas Territory of Gibraltar. The region located at the southern tip of the Iberian Peninsula has also been extending “regulatory guidelines for digital asset exchanges,” according to a partner at the international law firm Isolas LLP.

Just recently, the cryptocurrency custodian Xapo sent out a wave of emails that noted it would not serve U.S. customers going forward. “Due to a change in our global business strategy, Xapo, Inc. is leaving the U.S. market and will be closing all U.S. customer Xapo accounts. As a result, we’ll need you to transfer your funds to an external bitcoin address,” the company detailed.

This email followed the announcement Xapo made this past spring when it said that the company plans to become a digital bank in Gibraltar. “We will be relaunching as a digital bank late this year,” the company disclosed. On January 20, 2021, Gibraltar’s Finance Minister Albert Isola told Decrypt contributor Adriana Hamacher, that Xapo is establishing themselves as a “fully-fledged bank” in Gibraltar.

“Xapo have now established themselves in Gibraltar as a fully-fledged bank,” Gibraltar’s Finance Minister said, according to Hamacher’s recent report.

In addition to the statement made by Albert Isola, the partner at the international law firm Isolas LLP, Joey Garcia detailed on Tuesday how Gibraltar is extending regulatory guidelines for digital asset exchanges. Garcia is also a board member of IOV Labs (RSK) groups and the custodian Xapo.

“The framework aims to guide those who have the potential to form important foundational concepts for the work of other international organisations, such as the Financial Action Task Force, the European Commission and the International Organization of Securities Commissions (IOSCO),” the announcement further details. Garcia also stressed that Gibraltarians are forerunning pioneers when it comes to digital currency and blockchain innovation.

“Gibraltar has long been a leader when it comes to fostering innovation and in the development of virtual asset service providers’ regulatory standards and we are confident the 10th Core Principle will aid us even further in our mission to achieve this,” Garcia explained. “Particularly as the integrity of these markets is such a key focus internationally. We already have some of the largest groups in the world regulated in Gibraltar and this should continue to place those groups at the forefront of standard-setting in the industry,” the Isolas partner said.

The news about Xapo becoming a digital bank in Gibraltar follows the Gibraltar Financial Services Commission’s (GFSC) recently updated guidance notes for distributed ledger technology (DLT) providers. Additionally, news.Bitcoin.com’s financial columnist, Jeffrey Gogo reported on the Canadian firm 3iQ’s bitcoin fund getting listed on the Gibraltar Stock Exchange.

What do you think about Xapo becoming a digital bank in Gibraltar? Let us know what you think about this subject in the comments section below.