Xapo Bank, a pioneering digital asset custodian and bank, has announced that it has obtained full licensing to facilitate Bitcoin deposits through the Lightning Network. This development will allow Xapo Bank’s global custodians to deposit BTC using the Lightning Network, a Bitcoin Layer 2 solution focused on payments. The transactions will be processed through Lightspark, a company that offers payment infrastructure based on the Lightning Network.
The adoption of the Lightning Network has been growing in major Latin American markets like Argentina and Brazil, which has led to this latest development. Xapo Bank’s CEO, Seamus Rocca, expressed belief in the future of the Lightning Network as the main avenue for Bitcoin transactions, particularly for daily, small-scale exchanges. The bank stated that the Lightning Network offers near-zero transaction fees and represents a significant advancement in Bitcoin technology.
The new Lightning Network deposit feature is available to all Xapo Bank members, and the bank guarantees the USD deposits of its members up to the equivalent of €100,000. Xapo Bank emphasized that by embracing this technology early on, they are supporting its growth and ensuring that their customers can benefit from its potential while maintaining security.
David Marcus, the co-founder and CEO of Lightspark, highlighted the need to bring convenience to clients. He noted that today’s Bitcoin users not only want to store their wealth but also seamlessly integrate Bitcoin into their daily transactions.
Coinbase, the largest centralized exchange in the US, recently joined Xapo Bank in utilizing Lightspark to enable Lightning Network payments. This move by Coinbase comes a year after Xapo Bank announced its support for the Lightning Network. According to Xapo Bank, the market is increasingly adopting these services, with the number of Lightning Network payments through Xapo Bank increasing by 44% from February to March this year. Users from Argentina and Brazil accounted for the majority of these transactions due to the historical high inflation in these countries, which enhances Bitcoin’s value proposition for local users.
Xapo Bank has been at the forefront of offering Bitcoin services in the Latin American market. The bank was founded by entrepreneur Wences Caseras, who became interested in Bitcoin after experiencing the effects of inflation and capital controls in Argentina. He invested in BTC and built a vault to store his Bitcoin, which eventually led to the establishment of Xapo Bank. After selling its institutional custody business to Coinbase in 2019, Xapo Bank shifted its focus to serving global retail customers. In 2021, the bank obtained full licensing as a digital bank under the Gibraltar Financial Services Commission.
