Seamus Rocca, CEO of Xapo Bank, called on cryptocurrency banks to position Bitcoin BTC/USD as a viable alternative reserve currency to counter potential currency instability and capital controls in emerging markets.

What Happened: In an interview with Benzinga, Rocca highlighted Bitcoin's unique attributes, its decentralized structure, finite supply and blockchain transparency as critical for shielding investors from geopolitical and financial turbulence.

Rocca argued that traditional safe-haven assets, such as U.S. Treasuries, have lost their risk-free allure due to a rapidly evolving global financial order.

He pointed to Bitcoin's resilience, noting its faster recovery compared to traditional stocks following recent market downturns triggered by global trade uncertainties, including tariffs imposed by the Trump administration.

"In a world where stock markets crashed, yes, the Bitcoin price went down because of all the uncertainty that was out there. But Bitcoin bounced back faster than any of the stocks did," Rocca said, emphasizing its growing credibility as a store of value.

He further highlighted Bitcoin's potential to serve as a hedge against currency devaluation and restrictive capital controls, particularly in emerging markets where tariff-driven policies could exacerbate economic volatility.

"In a world of huge uncertainty, here's an asset that is not controlled by any government. Here's an asset that's completely decentralized, it's finite, and nobody can print more of it," Rocca stated, advocating for a long-term view of Bitcoin as a reserve currency rather than a speculative asset.

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Why It Matters: Xapo Bank, which began as a Bitcoin wallet provider in 2013, has transformed into a fully regulated private bank based in Gibraltar, catering to high-net-worth individuals and long-term Bitcoin holders.

The bank offers a suite of services, including secure custody, borrowing against Bitcoin, yield generation through conservative investment strategies, and competitive trading options.

Unlike crypto exchanges focused on short-term trading, Xapo targets clients who prioritize wealth preservation over speculative gains.

Rocca noted that 25% of Xapo's customers are over 50, reflecting a demographic with a lower risk appetite seeking stable, secure Bitcoin management.

Rocca cautioned that Bitcoin's volatility and fragmented regulatory environments, particularly in the U.S., pose challenges to its widespread adoption as a reserve currency.

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In the U.S., state-by-state licensing requirements complicate operations for crypto banks, lacking the federal-level cohesion seen in regions like the European Economic Area.

"If I get a license in New York, why does that not apply to all the other states?" Rocca questioned, highlighting the need for streamlined regulations to foster innovation without stifling the industry.

Despite these hurdles, Rocca remains optimistic about Bitcoin's trajectory, predicting it will shed its speculative reputation within the next few years.

He emphasized Xapo's role in providing peace of mind through robust security measures, noting the bank's decade-long experience and millions invested annually in safeguarding client assets.

This contrasts with the risks of self-custody, where a single error could lead to significant losses, especially as Bitcoin's value is projected to rise.

Critics, however, argue that Bitcoin's price swings and lack of universal regulatory clarity could undermine its reliability as a reserve currency, particularly in emerging markets prone to economic shocks.

Additionally, the integration of Bitcoin into traditional banking systems remains complex, with large institutions hesitant to fully embrace decentralized assets due to competitive dynamics and trust issues.

Xapo's strategy aligns with a broader trend of institutional interest in Bitcoin, spurred by the success of Bitcoin ETFs from firms like BlackRock BLK and Fidelity.

What’s Next: Rocca sees crypto banks like Xapo bridging the gap between traditional finance and decentralized assets, offering services that appeal to clients building generational wealth.

"My view, this is what we're betting Xapo on, is that people will eventually take a long-term view of Bitcoin as a reserve currency," he said, reinforcing the bank's commitment to this vision.

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