US Goes “Full Turbo” in Scramble to Regulate Crypto, Says Xapo Bank’s Garcia

How times have changed. 12 years on, Xapo Bank is thriving on new rules and standards in its adopted home of Gibraltar. It has divested its original institutional custody business, selling it to Coinbase, a crypto exchange, in 2019 including 1 million BTC. Instead, it styles itself as a fully regulated Bitcoin and blockchain-native bank that offers exposure to crypto in a secure environment, as well as an integrated banking approach to payment rails and stablecoins. 

Appropriate regulation

Finding appropriate regulation, according to Joey Garcia, the bank’s strategy and policy chief, has been critical to Xapo Bank’s success.

“We are a bank that integrates with the blockchain system. For many regulators that would be quite challenging,” he said, in a September 2025 interview in London’s Shoreditch area.

Regulation, traditionally the antithesis of free-market capitalism, wasn’t exactly the first request of the libertarians who drove the early adoption of Bitcoin. But the confidence that the market is being regulated has become an extraordinary catalyst for crypto assets in 2025, pulling in hoards of consumers and institutions.

“One of the biggest drivers for crypto, now and in the coming years, is the development of the right regulatory infrastructure,” Garcia added: “It’s a massive driver for adoption.”

Very few industry practitioners visit the world’s political capitals as frequently as Garcia does. He spoke to Sandmark fresh from delivering a private briefing session to members of the UK Parliament who consult him on policymaking around blockchain and business. 

A few weeks earlier, he met American officials at the Wyoming Blockchain Symposium, an invitation-only event that attracted regulatory dignitaries such as Paul S. Atkins, Chairman of the US Securities and Exchange Commission (SEC); Jerome Powell, Chair of the US Federal Reserve; Michelle W. Bowman, the Vice Chair for Supervision at the US Federal Reserve; and influential members of Congress such as Cynthia Lummis and Tim Scott.

“Full turbo”

Garcia was impressed by the depth of knowledge that US officials bring to the discussion today, compared with a few years ago.

“They were all heavyweights, attending a crypto conference of a few hundred people to show support. If you have discussions with commissioners, even state governors, they are evidently fully behind making America the crypto capital of the world. The US has gone full turbo on crypto and everyone else is now scrambling to find their place.”

Hosted alongside the Fed’s annual Jackson Hole Economic Policy Symposium, the Wyoming digital assets junket highlighted a deepening of knowledge among American policymakers, relative to previous regimes that were more focused on enforcement. The impetus for crypto adoption may be led most vocally by the White House, however the word from industry observers such as Garcia is that it’s permeating through the ranks of government institutions. 

Asian heat

At the same time, competition from other jurisdictions continues to heat up. In addition to Asia’s leading crypto regulatory hub, Singapore, its rival Hong Kong has taken important steps. Meanwhile, the Philippines is becoming particularly attractive and is likely to lure a lot of platforms to domicile for regulated crypto trading activities, according to Garcia. 

“It is essential that banks and regulators are open to engaging in new technologies and departing from an overly cautious mindset,” the Fed’s Bowman said at the Wyoming blockchain gathering, according to a copy of her speech published on the Fed’s website. She was appointed by Donald Trump during his first term.

The European Union and the UK would do well to take some inspiration from the dynamism of the US and certain parts of Asia. The EU made strides with its Markets in Crypto-Assets Regulation (MiCAR) – a new regulatory framework for assets and a “passporting” scheme for companies to set up operations in one of the 27 member states and deliver services to any other. However, France’s securities watchdog recently undermined the framework, suggesting it needed tighter supervision from a central regulator such as ESMA in Paris. The French might turn away specific companies even if they were MiCAR compliant in one country. ESMA is the European Securities and Markets Authority.

Playing catch-up

The UK has been “very slow” according to Garcia, although he sees “second or third-mover advantages” that could still play out well for London, provided rule makers learn from the errors of other jurisdictions that created ineffective and under-invested frameworks.

George Osborne, a former UK Chancellor of the Exchequer (finance minister), wrote in the Financial Times in August that his country was focusing too much on consumer and investor protection and not enough on supporting adoption. 

“On crypto and stablecoins, as on too many other things, the hard truth is this: we’re being completely left behind. It’s time to catch up,” Osborne wrote. He is now an advisor to Coinbase.

British officials are rushing to align with American counterparts. Perhaps the City of London might learn a few things from the British Overseas Territory where Joey Garcia was born and where Xapo Bank has been based since 2021.

Gibraltarian example

Gibraltar, a small peninsula at the geographical foot of Spain, shook off a reputation for shell companies and tax dodgers and has reinvented itself in the past 15 years through private banking to international standards, investment funds and gaming platforms, among other initiatives. Xapo Bank counts trading platforms such as eToro and Bullish as its neighbours today.

Garcia recalled a visit to Gibraltar by the bank’s founder Wences Casares more than a decade ago, when the Argentinian-born entrepreneur lamented the lack of clear rules in any specific jurisdiction. The territory then delivered Distributed Ledger Technology (DLT) regulations for businesses, brought digital assets under the remit of its Financial Services Commission (FSC) and introduced a virtual asset regulatory framework. 

Garcia is still based in the town where he grew up and previously worked for Isolas, a respected local family law firm, and in various consultancy roles related to blockchain and cryptocurrencies. However, his work on digital asset regulation and supervision has led him all over the world, as an adviser to groups at the US Treasury and the United Nations. He also ran stress-tests for countries in the aftermath of the collapse of FTX, picking holes in under-prepared supervisory frameworks to warn various governments how to avoid the same happening under their watch.

Gibraltar’s small size and agile approach serves its incumbent companies well – Bullish is benefiting from the introduction this year of a new derivatives clearing framework for settlements in virtual assets – and the FSC has some room to offer additional licences to hand-picked new applicants.

However, with a population under 40,000 and covering less than 7 square kilometers (2.7 square miles), Gibraltar cannot answer all the needs of global crypto companies. Xapo Bank still maintains a nuclear strike-proof bunker in its former home of Switzerland for data storage and servers, for example. Its workforce of more than 190 is scattered around 42 countries. 

If Gibraltar has already hit its own “turbo” button, it perhaps serves as an example for other emerging crypto regulatory hubs to follow rather than a location poised for massive expansion.