I haven’t bought the XIAO yet.
But I would use a LiPO 3.7V battery.
There is a voltage regulator as msfujino pointed out.
And it looks like it can take 5V and convert it to 3.3V
On the website, it shows:
Power 3.3V/5V DC
For general I/O pins:
Working voltage of MCU is 3.3V . Voltage input connected to general I/O pins may cause chip damage if it’ higher than 3.3V .
For power supply pins:
The built-in DC-DC converter circuit able to change 5V voltage into 3.3V allows to power the device with a 5V supply via VIN-PIN and 5V-PIN.
It’s the same on the other model (with battery charging capabilities):