While the financial industry grapples with its relationship with digital assets, some firms are already building the necessary bridges. For years, a deep chasm has separated the worlds of traditional banking and cryptocurrency, leaving businesses struggling to move between fiat and digital realms. XBD Group, a global digital asset conglomerate, is tackling this problem head-on with a compliance-first approach designed to win the trust of institutions and regulators alike.
At Money 20/20 Europe, we spoke with Zeeshan Uppal, COO and Compliance Director at XBD Group, to understand how the company is breaking the cycle of friction between the old and new financial worlds.
Solving the On-Ramp Dilemma
The core problem XBD addresses is a familiar one for any business operating in the crypto space. “If you want to just simply add funds to your Coinbase wallet from a Barclays Bank account, you’re unable to do that,” Uppal explained. “It’s made life very difficult.” This institutional reluctance creates significant operational hurdles for even the most legitimate enterprises.
XBD’s solution is both elegant and effective. The firm, which started as an OTC desk for institutional clients, realized it could solve the on-and-off-ramp problem by becoming a one-stop shop. “We’re able to issue virtual IBAN accounts to our clients,” Uppal said. “Use that virtual IBAN account to collect their Fiat funds, on and off ramp into digital assets, and if they then settle in Fiat to that virtual IBAN account, they’re able to then associate themselves with all the traditional financial institutions because it’s a named bank account to a named bank account.”
This model effectively creates a regulated and transparent pathway, giving institutional clients the confidence and capability to transact seamlessly between fiat and crypto.
Compliance as the Cornerstone
In a sector often viewed with suspicion by traditional players, XBD has anchored its strategy in regulation. With a Canadian MSB license, a Lithuanian VASP registration, and licenses pending in the UAE (VARA) and the UK (FCA EMI acquisition), the company’s global footprint is built on a foundation of regulatory approval.
“We very much focus on a compliance-led approach,” Uppal emphasized.
“We understand what banks want.”
“We speak the same language as financial services providers.”
By building robust KYC, KYB, and transaction monitoring frameworks, XBD provides the safety and security that traditional institutions demand, de-risking the entire process. This focus has propelled the company’s growth, now handling 50-75 million in monthly volume and having surpassed a billion dollars in total volume since its inception.
The Power and Paradox of Stablecoins
Stablecoins are central to XBD’s offering, particularly for international remittance. Uppal highlighted their core advantages: speed, cost-effectiveness, and traceability. “Some examples of trying to move money internationally through traditional financial institutions, [you have] T+1, T+2, even T+3 settlements,” he noted. “With stablecoins, it’s instant.” This is a game-changer for their enterprise-level clients, who need to move funds across borders efficiently. Stablecoins also serve as a crucial hedge against foreign exchange volatility in developing economies.
However, Uppal offered a nuanced view of the stablecoin landscape, describing it as “the good, the bad, and the ugly.”
- The Good: Unbeatable speed of settlement and low transaction costs.
- The Bad: The slow pace of adoption by traditional financial institutions, which are still struggling to move from embracing fintech to understanding Web3.
- The Ugly: The significant money laundering risk and the challenge of applying regulation without stifling innovation.
The regulatory environment itself is a double-edged sword. While frameworks like Europe’s MiCA bring clarity, they also create barriers. “USDT and Tether are just not playing with [MiCA], so it removes a massive potential out of that market,” Uppal pointed out. This creates a complex dynamic where regulation can both help and hinder adoption.
Looking ahead, Uppal sees the rise of Central Bank Digital Currencies (CBDCs) as an “interesting concept that’s not spoken about enough.” He expressed concern that this could represent traditional institutions co-opting the technology to “monopolize elements of the industry for themselves,” potentially leading to a cashless society where every transaction is tracked. The core tension, as he sees it, is the attempt “to centralize decentralized finance,” a concept that runs contrary to the original ethos of DeFi.
For now, firms like XBD are navigating this complex terrain by providing the essential, regulated infrastructure that allows businesses to harness the power of digital assets today.
