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$1 billion of TUSD reserves transferred to the Bahamas

March 17, 2023
11:59 AM

TrueUSD (TUSD) stablecoin operator Archblock moved $1 billion in reserves backing the token to a bank in the Bahamas after U.S. regulators closed three U.S. banks at once a few days ago. This is reported Bloomberg.

Alex de Lorraine, chief financial officer and COO of Archblock, said the decision to move funds to Capital Union in recent days was a result of deteriorating banking conditions for e-business in the US.

“Even operating accounts just for paying taxes, managing payroll and paying expenses is very difficult to get unless you are a multi-billion dollar business,” he said.

Now, according to the agency, Archblock controls about $2 billion in reserves that support TUSD. With the transfer of the reserve, Capital Union Bank now owns more than $1.4 billion, up from the $438 million as of March 10.

“We transferred the money to Capital Union Bank mainly to provide funds, since we can immediately invest in very short-term US Treasuries, which is funny in itself. The funds are in the US, but for that we need to use an offshore bank,” de Lorraine said.

Archblock had over $852 million in the previously closed Signature Bank, with another $202 million already in transit at Capital Union. At the same time, Capital Union was also a partner of Tether, whose main cash reserves are in banks in the Bahamas.

TrueUSD issuance has doubled over the past month after regulators in New York forced the shutdown of rival stablecoin BUSD, the token of the world’s largest cryptocurrency exchange Binance, in February. Binance later said it plans to phase out the zero-fee trading structure for Bitcoin (BTC) bought with BUSD and shift its promotion to TrueUSD instead, further bolstering its upside prospects.

Source: Cryptocurrency

David

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