Xapo Bank Review

Xapo Bank Review: Quick Overview

Short on time? I’ll kickstart this Xapo review with a handy table containing all of the most important information that you need to know about the crypto and banking app in question.

That said, while it’s objective, it won’t really show the full picture - that’s why I recommend reading my full review below!

Table: A quick overview of Xapo

Xapo Bank presents itself as a regulated, feature-heavy service provider that’s been around for a while, and has built a reputation for reliability and trust.

Who’s Xapo For?

Reading through user Xapo Bank reviews left online, you’ll quickly notice a pattern - the banking and crypto platform in question caters to a few specific groups of Bitcoin enthusiasts.

That’s not to say that anyone who falls outside of these groups (by strict definition) wouldn’t find value in using Xapo Bank. However, if you’re part of Xapo’s target demographic, chances are that you’ll be able to utilize the perks offered by this company to a greater extent.

Xapo is mainly for:

• High net worth Bitcoin holders. Xapo has a $1,000 annual subscription fee - that’s not a small sum of money to pay for a subscription. Furthermore, a lot of the benefits offered by Xapo (LTV ratio, cashbacks, fees) depend on the amount of BTC that you’re holding in your account. This makes the platform suitable for higher net worth individuals who are interested in hodling their cryptocurrencies.
• People who want to transfer money. Xapo offers clients very competitive transaction pricing. Xapo fees shine when compared to even some of the industry’s biggest names - this makes the banking service attractive to anyone who plans to perform a lot of transactions, especially with BTC.
• People who want to grow their wealth. User Xapo Bank reviews often talk about the different ways of how you can earn on the platform, and grow your personal wealth by simply keeping your assets with this app. Whether it be a Bitcoin collateral-backed loan (assuming BTC prices will rise) or the USD & BTC savings accounts, Xapo is an attractive option to look into, if you lean more towards the hodler side of the table.
• People who need liquidity without selling their BTC. Thanks to a favorable LTV ratio and a high loan ceiling, users can easily and quickly access large amounts of liquidity without having to sell their Bitcoin. As a sidenote, LTV ratio helps determine the maximum amount of money you can borrow, and when liquidation will take place^[1].

If you fall into either of these four categories of crypto enthusiasts, chances are that the Xapo Bank will present itself to be a pretty interesting cryptocurrency banking alternative that’s worth exploring further.

Let’s do just that, and take a look at the main advantages of the platform.

Advantages

Here are the core features & advantages that make Xapo stand out:

• Licensed & regulated
• BTC cashback
• Debit card available
• Attractive APY savings accounts
• BTC-backed loans

First of all, as I’ve mentioned earlier in the Xapo Bank review, this platform is fully licensed and regulated. Specifically, it holds private bank, money lender, and Virtual Asset Service Provider (VASP) licenses, and is regulated by the Gibraltar Financial Services Commission (GFSC).

KYC and AML verification checks are mandatory on Xapo - while this eliminates the potential for anonymous usage, it does provide additional security and peace of mind.

Next up, the Xapo debit card + BTC cashback combo. I’ll get into the debit card details in a separate chapter further on in the Xapo Bank review, but essentially, the card enables up to 1% unlimited BTC cashback. Furthermore, there are no FX fees involved - while you could argue that this is somewhat offset by the fixed annual usage fee, frequent Xapo card users can definitely benefit from this feature.

Just like traditional banking institutions, the Xapo Bitcoin Bank offers its clients a savings account. It’s USD- and BTC-based - depositing the former can earn you an APY of up to 3.9% (up to €100,000 protected), while BTC savings can yield up to 0.5% APY (for the first 5 BTC).

Lastly, BTC-backed loans. There’s a lot to say about this feature, so I’ll also expand on it a bit more later in the Xapo Bank review. However, what you should know now is that a) Xapo Bank doesn’t support these loans in the UK, and b) clients from supported countries can borrow up to $1,000,000 with BTC collateral, no fees attached.

To round up the benefits, the cherry on the cake are the Xapo fees for Bitcoin trading. Xapo offers a 0.1% fee for your trades, competing with some of the biggest exchanges on the market.

Limitations

User Xapo Bank reviews are generally very positive towards the service provider. That said, there are a few gripes that both I, as well as some other clients of Xapo, have noticed, namely:

• Expensive membership
• Xapo Bank doesn’t support BTC-backed loans in the UK

As I’ve mentioned a few times in this Xapo Bank review already, the service comes equipped with a premium price tag - $1,000 per year. There’s no free trial or a free version of the bank available, either - if you want to use the Xapo Bank app, you’ll need to pay up.

Once you create an account, the platform will be restricted for you, until there’s a balance of $1,000 in your account (or the equivalent in BTC). This sum will be deducted from your account automatically when it’s reached, and then the entirety of Xapo’s services will unlock for you.

Another notable con is that the BTC-backed loans aren’t yet available for users in the United Kingdom. If you reside in this country and are looking for a similar service, you’ll need to look elsewhere.

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Debit Card

The Xapo card is one of the core features of the Xapo Bank app. Basically, it’s a debit card that houses additional benefits, reserved exclusively for Xapo’s client base.

With the card, users can spend and transact globally in both USD and BTC. The Xapo debit card can be used for both purchases and ATM withdrawals.

The card has no hidden fees associated with payments done through it - not even for foreign transactions. It’s available in over 100 different countries - the list is dynamic, so your best bet is to consult the Xapo official website to find out if your country is on the list.

And, of course, we can’t forget the up to 1% BTC cashback - that’s available with the Xapo card, as well.

Here’s a quick breakdown of all of the notable features you can expect from owning and using the card:

• You can order a card made out of metal
• Accepted globally, USD & BTC transactions and ATM withdrawals
• No hidden fees
• No network fees, 0.1% spread VS market rate
• Up to $100 free ATM cash withdrawals (2% thereafter)
• Up to 1% unlimited BTC cashback (paid in BTC)
• Unlimited free foreign exchange
• Multiple virtual card support for secure transactions
• Global availability - available in over 100 countries

Even if you’re looking for Xapo Bank alternatives, it’s difficult to deny the fact that the Xapo card comes with some very enticing features. It’s one of the cheapest ways to transact in BTC out there - something that isn’t highlighted enough in user Xapo Bank reviews.

BTC-Backed Loans

Bitcoin-backed loans are another core feature offered by Xapo.

What these loans essentially do is they allow you to borrow money without having to sell your BTC. Instead, you use it as collateral for the loan. In other words, you get to access a lot of liquidity without missing out on potential gains (assuming that the market is in an uptrend).

There are other benefits to note, as well - global availability, flexibility, fast loan processing, and more. Long story short - many enthusiasts believe using Bitcoin as collateral to be a beneficial financial strategy.

Circling back to Xapo Bitcoin loans, users can borrow up to $1 million, with loan-to-value (LTV) ratios between 20% and 40% (based on their BTC holdings). Interest rates start at around 10% per year, with flexible terms ranging from 1 to 12 months, no hidden fees, and no early repayment penalties.

The money you borrow will be credited to your account instantly, and you can then choose to either spend it via your Xapo debit card, or transfer it to a third-party account (bank transfer, crypto transfer, or a UMA transfer).

Here’s a breakdown of the most notable points related to Xapo’s BTC-backed loan service:

• Up to $1,000,000 instant loans
• Up to 40% LTV
• Around a 10% annual interest rate
• Repay anytime - no penalties for early repayments
• Collateral stored in the Vault, remains untouched
• Repay either the full sum, or split it into multiple repayments
• Flexible terms - 1 month to 1 year

The perks are almost self-evident, and with few centralized crypto lending services available, Xapo certainly offers an attention-grabbing package.

Fees and Limits

Throughout this Xapo Bank review, I’ve thrown out a lot of different numbers regarding Xapo fees. It can get a bit confusing, so allow me to segment everything into a simple-to-follow table for you:

Table: Xapo fees

These are the main fees that you’ll encounter with the Xapo Bank app. There are many more smaller ones, as well - you can find them on Xapo's official website. The company does make a point to emphasis that there are “no hidden fees” on a lot of the services that they offer (i.e. their BTC-backed lending system).

No card FX fees and no loan fees are convenient for anyone who plans to utilize Xapo’s feature offerings to their full extent. With a 0.1% BTC spread, the platform will suit both hodlers as well as those who prefer to send and receive BTC more often.

Security

Security is the main feature that should be looked into, whenever you’re looking for a financial service provider. This is especially so true within the crypto space - with scams and hacking attempts running rampant^[2], it’s important to find a platform that employs strong security measures to protect its users' personal information and funds.

If you’re curious about the Xapo wallet or the measures that the bank employs to keep its operations running smoothly, rest assured - the platform views security very seriously.

Xapo’s security measures include, but are not limited to:

• KYC & AML checks
• 24/7 monitoring
• MPC protocols
• Physical, military-grade bunkers
• Periodic audits
• Hardware security keys
• 2FA
• Vault
• Location lock
• Real-time alerts
• etc.

I must say - Xapo really has its security aspect figured out! Even some of the biggest, most established names in the industry would be proud to flex this level of security with their services.

Taking a closer look at the list above, you can see that Xapo features both user-side (2FA, location locks, Vault), as well as platform-side (KYC & AML, audits) security features. This means that, while you have a lot of control over how you secure your account, Xapo takes it a step further with some general safety measures.

From what I could gather reading through user Xapo Bank reviews left online, the platform has never suffered a severe hacking or data breach attempt. A clean record and top-tier security equate to peace of mind for the company’s clients!

Customer Support

Xapo offers a few customer support options to its users.

First of all, you have the generic FAQs on their official website - you can find answers to a lot of common questions that you might have here. While custom situations are likely going to require you to reach out to support directly, it’s still nice to see that the Xapo Bank features a dedicated knowledge base.

Another way to get help with an inquiry (and the only way, if you’re not a registered user) is to email the company directly. While you shouldn’t expect an instant response, I haven’t seen many user complaints regarding support wait times.

Lastly, registered users will have the opportunity to chat with dedicated agents. These people are there to help you out with any and all questions / issues that you might be having, and can be reached via a direct call booking.

All in all, while the lack of a live chat feature on the company’s official website is a bit disappointing, it’s still good to know that you’ll be able to get help, if anything unexpected were to happen.

User Experience

The Xapo Bank is available to be accessed via a dedicated mobile app (iOS & Android).

The Xapo Bank app houses all of the features discussed in this Xapo Bank review - you can hodl, earn, transact in and borrow money / Bitcoin via the app, in a streamlined and beginner-friendly manner.

The app is arguably the more common way to use Xapo, with it having over 100,000 downloads on Google Play (and a score of 4.2). It’s essentially a way to access your funds quickly!

Even though registration is available via the browser (desktop) version of the website, you won’t really be spending a lot of time there, since you’ll want to move on to actually using the platform itself. This can only be done by using the Xapo Bank app.

Speaking of which.

How to Use Xapo

Exploring the actual usability aspect of the Xapo Bank app would require a separate tutorial, in itself. Instead, let’s take a quick look at what the registration process would look like if you were to sign up today.

How to Create a Xapo Account

Let’s take it from the top:

You’ll get redirected to a membership page advertising all of the main benefits you can expect to receive after becoming a registered Xapo user. There’s also a list of requirements for creating an account - read through everything, and if it all sounds good, click [Join Now].

If you don’t make the payment in the first 30 days from creating your account, it will be frozen, with all of the assets kept within required to be withdrawn. The account will remain locked until you’re able to make the payment, and continue using Xapo.

Conclusions: Is Xapo Right for You?

So - is Xapo right for you, and is it even worth checking out, in the first place?

The answer to the former question will depend heavily on what it is that you’re looking for, cryptocurrency service-wise. That said, I’d say that the platform is definitely worth checking out - most user Xapo Bank reviews would seem to agree, as well.

Xapo offers an array of interesting features that, while mostly targeted at a couple of specific types of cryptocurrency enthusiasts, certainly offer benefits to anyone and everyone who’s a hodler of BTC. Whether it be those same hodling services (storage, loans) or crypto spending (transactions, trading, debit card), Xapo’s feature offerings are certainly attractive, to say the least.

The one huge bottleneck is the fact that the service is steeply priced, with no free options available for users to try out. Since the only subscription option is definitely not on the affordable side of things ($1,000 per year), you’ll likely want to subscribe to the Xapo Bank only if you feel like the platform could suit your wants and needs well - otherwise, you might want to look for Xapo Bank alternatives.

Xapo is available as a mobile app (iOS & Android). Check it out - perhaps it’s the ideal service for you!

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. Humboldt F. L., Packham N., Härdle W. K., Merkl R.: 'Option-based pricing of secured lending in P2P crypto markets';

2. Siu G. A., Hutchings A., Vasek M., Moore T., et. al.: '“Invest in crypto!”: An analysis of investment scam advertisements found in Bitcointalk'.