Is Wavecrest not exposed to the risk that Xapo will not be able to fulfill its obligations, for example if an orderly market in bitcoin-USD conversions breaks down?
No, Wavecrest has a stored value account which their payors must top up ahead of time in order to be able to fund payments.
This is identical to Paypal, or any other payment rail in the industry. Payment companies don't in general make loans to their customers (though anything is negotiable in principle).
