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Can a bank receive and send USDT?

5
min read
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As digital assets and cryptocurrencies gain more popularity, the financial world faces a big question: Can traditional banks adapt to support this new asset class?

What is USDT (Tether)?

USDT, or Tether, is a stablecoin that maintains a steady value. It is a digital asset designed to provide stability and is often pegged to the value of the US Dollar, making it a popular choice among cryptocurrency traders and investors.

USDT is pegged to the US Dollar on a 1:1 basis. This means one USDT is worth one USD.

The current state of banks and cryptocurrencies

Traditional banks have been slow to adopt digital assets for a few reasons.

Regulatory compliance 

To be able to offer services related to digital assets and stablecoins, including USDT, banks need to ensure full compliance with the relevant regulations, which is a time-consuming and costly process. 

Technological adaptation

Banks also have to adapt new technology infrastructure to accommodate the new form of currency. Traditional fiat currencies are currently managed through centralised systems like the SWIFT network. However, stablecoins like USDT and other digital assets operate on decentralised blockchain platforms like Ethereum, Tron, and Omni.

Security 

In addition, banks must ensure that their systems are secure and resilient to handle the unique risks associated with digital assets.

Can a bank make USDT transfers?

Xapo Bank is currently the only regulated bank in the world that allows sending and receiving USDT. When Xapo Bank members send or receive USDT, it is instantly converted to US Dollars. The converted USD then automatically starts to earn 4.5% annual interest that’s paid daily.

How do I transfer USDT to a bank account?

Sending and receiving USDT involves learning how to transfer USDT to a bank account. Here is a helpful guide:

How much does it cost to transfer USDT?

Transferring USDT typically comes with two types of fees. The first one is the exchange fee, which crypto exchanges charge when you buy or sell USDT tokens on their platform. Although the specific fee structure varies among exchanges, it usually falls between 0.1% to 1% of the transaction amount. 

Then there are the network fees, often referred to as gas fees. These are required by the underlying blockchain network, such as Ethereum or Tron, to process and validate the USDT transaction. The fees are usually given in the native cryptocurrency of the network (like Ether for Ethereum) and are used to incentivise miners (the validators that ensure security) on the network. The cost of these fees varies between networks. In the case of Ethereum, this can range from a few cents to a handful of Dollars per transaction. Gas fees tend to rise during high network activity or congestion periods due to increased demand for block space. 

Xapo Bank, on the other hand, will not charge you any extra fees on top of the blockchain fees to send USDT into your Xapo Bank account.

How long does a USDT transfer take? 

USDT transfers are relatively fast. Usually, USDT transfers take up to 30 minutes to be processed, depending on the blockchain used and the congestion of that particular network. 

How much does it cost to send USDT to a wallet?

Similar to moving USDT to a bank account, you will be charged exchange and gas fees when you send USDT to a wallet. The total cost will also depend on the exchange you use for the transfer and the blockchain network your USDT lives on.

Xapo Bank offers USDT deposits and withdrawals at no extra cost besides the blockchain fee. Xapo Bank members can send and receive USDT using their USD account with automatic conversion from USDT to USD and the reverse.

How do I convert USDT to US Dollars?

When you convert your USDT tokens into regular fiat currency, it's like withdrawing your USDT funds and transferring them to a traditional bank account. This is usually done through cryptocurrency exchanges or peer-to-peer platforms.

With Xapo Bank, the process is simplified and secure. You don't have to convert your USDT to USD at an exchange platform before you send it to a bank account. Instead, Xapo Bank cuts out the middle man, and members can send their USDT directly to their Xapo Bank USD  account. The USDT is automatically converted to USD, without any additional fees besides the blockchain fee. It is deposited to the member’s USD account and starts to earn 4.5% interest upon receipt. 

Become a Xapo Bank member and enjoy a simplified stablecoin experience that lets you seamlessly transfer and convert USDT and USD.

Disclaimer

This page is for general information purposes only and is not intended to constitute legal or other professional advice or a recommendation of any kind whatsoever and should not be relied upon or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations or undertakings about any of the content of this article (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content), or any content of any other material referred to or accessed by hyperlinks through this article. We make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.

Xapo Bank is a crypto-enabled bank licensed by the Gibraltar Financial Services Commission. We give our members access to a US Dollar and Bitcoin account, successfully bridging the gap between traditional banking and crypto. USDC deposits into Xapo are immediately converted to USD on a 1:1 basis, giving instant dollar cash value with zero exchange fees.

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