Argentina and Brazil accounted for 43% of Lightning Network payments executed via Xapo in March.
Xapo Bank, the pioneering digital asset custodian and bank, is the first fully licensed bank to support Bitcoin deposits via Lightning Network.
Announced on May 23, the move allows Xapo’s global custodians to deposit BTC using Lightning Network, the payments-focussed Bitcoin Layer 2, via Lightspark, a firm providing Lightning Network-based payments infrastructure. Xapo does not charge fees for users depositing via Lightning Network.
“We believe in the Lightning Network’s future as the primary avenue for Bitcoin transactions, especially for daily, small-scale exchanges,” said Seamus Rocca, CEO of Xapo Bank.
“Today’s Bitcoin users seek not only to store their wealth but also to integrate Bitcoin into their daily transactions seamlessly,” said David Marcus, CEO and Co-Founder of Lightspark.
Coinbase, the largest U.S. centralized exchange, similarly tapped LightSpark to launch support for Lightning Network payments three weeks ago.
The move follows Xapo introducing support for Lightning Network payments last year.
Adoption of the service recently spiked, with the number of Lightning Network payments executed via Xapo increased by 44% from February through March 2024, with Argentinian and Brazilian users accounting for 29% and 14% of transactions, respectively.
Xapo noted that the countries have historically experienced high inflation, bolstering the value proposition of Bitcoin for local users.
According to Look Into Bitcoin, 4,868.2 BTC worth nearly $337.7 million is currently locked on the Lightning Network.
Xapo was among the first firms to provide Bitcoin services to the Latin American market. The company was founded by Wences Caseras, an entrepreneur who launched the first internet service provider in Argentina in 1994.
Caseras became interested in Bitcoin after his family was severely impacted by rampant inflation and stringent capital controls in Argentina. After investing in BTC, Caseras built a “vault” to store his Bitcoin, which became the foundation for Xapo.
Caseras went on to found the Lemon Bitcoin wallet in 2012, and Xapo in the following year. Xapo’s institutional custody business was acquired by Coinbase in 2019. Xapo Bank became a fully licensed digital bank under the Gibraltar Financial Services Commission in 2021.
