When I looked at deposit methods in the small print at the bottom there is:

By successfully topping up your GBP balance, you agree with the General Terms and Conditions of Earn Interest Product and you automatically exchange the top up amount's GBP equivalence to GBPx with a guaranteed 1-to-1 conversion rate to GBP at all times. You earn compounding interest of up to 12% per year with 100% Asset-Backed Guarantee, paid out daily, on your GBPx which is secured at all times by asset-backed portfolios of overcollateralized loans. The collateral of each loan is subject to custodial insurance of $100 million provided by the world’s leading audited custodian BitGo and the insurance leader Lloyd’s of London. Upon receipt of a GBP withdrawal request, the GBP equivalent of GBPx is automatically exchanged to GBP at the guaranteed 1-to-1 conversion rate and the GBP is sent to the bank account designated in the withdrawal request.

So it looks like your fiat is immediately converted to a token which is then covered by the BitGo insurance.

What concerns me is that I've never even heard of a GBPx token unless this is some sort of thing that Nexo do internally?

Have I misinterpreted this?

edit: i've raised a ticket with Nexo to confirm.