TrueUSD (TUSD) Transfers $1 Billion in Reserves to Bahamas Amidst Banking Turmoil in the US
In response to the recent banking crisis in the United States, Archblock, the operator of stablecoin TrueUSD (TUSD), has reportedly moved $1 billion in reserves to Capital Union Bank in the Bahamas. This decision was made after Archblock’s partner bank, Signature Bank, was unexpectedly shut down on March 10. The move was prompted by the closure of three banks in the US, which were ordered by authorities to cease operations.
Archblock’s Decision to Transfer Funds Raises Questions About Stability of US Banking System
Per Bloomberg, as the overseer of approximately $2 billion in reserves that back TrueUSD (TUSD), Archblock’s decision to transfer $1 billion in reserves to Capital Union Bank in the Bahamas has been met with success. Independent accounting firm attestation has shown that the bank now holds over $1.4 billion in reserves, which marks a significant increase from the $438 million it held on March 10.
Following the sudden closure of Signature Bank, Archblock, the overseer of TUSD, immediately initiated the transfer of its funds to Capital Union Bank in the Bahamas to safeguard its reserves. At present, Archblock has no funds remaining with Signature Bank, as attestation records show. With this successful transfer, Archblock has ensured the safety and stability of its reserves, which ultimately fortifies the reliability of TUSD for investors and users alike.
Archblock’s Chief Financial Officer and Chief Operating Officer, Alex de Lorraine, disclosed to Bloomberg News that the decision to transfer funds to Capital Union Bank was prompted by the declining banking conditions for electronic money businesses in the United States.
As previously reported, this month has seen the forced closure or voluntary dissolution of several banks, including Silvergate Bank, Silicon Valley Bank, and Signature Bank, leaving digital asset companies in a challenging situation. The urgent need to secure their reserves and enable fund transfers has compelled many of them to seek alternative solutions.
Circle Internet Financial Ltd. recently made headlines when its USDC token experienced its largest decline in dollar value to date. The sharp drop occurred after Circle revealed that it had deposited $3.3 billion in Silicon Valley Bank, which was subsequently shut down.
Prior to this, Capital Union Bank was a partner of Tether, a prominent stablecoin whose primary cash reserves are located in banks in the Bahamas. Capital Union Bank has long been a trusted partner to various crypto businesses, allowing them to deposit and trade digital assets alongside traditional currencies and assets in a single account.
Speculation Continues to Surround Binance’s Stablecoin Initiatives Amid Regulatory Scrutiny
CoinMarketCap data has indicated that TRU, the governance token of the decentralized lending protocol TrueFi, has surged by over 200% in the past few hours. This sudden rise in value has been attributed to speculation surrounding Binance stablecoins.
Blockchain data has recently revealed that Binance, the world’s largest cryptocurrency exchange, created $50 million worth of stablecoin TrueUSD (TUSD), which has resulted in increased speculation amongst investors regarding TUSD’s potential expanded role in trading on the Binance exchange. This speculation has emerged following regulatory action taken against Binance USD (BUSD) issued by Paxos.
It is important to note, however, that TRU and TUSD are separate tokens that may cause confusion amongst investors. The issuer of TrueUSD and TRU, TrustToken, had separated them some time ago. TRU, in particular, is the governance token of TrueFi, a decentralized lending protocol, and should not be mistaken for TrueUSD.
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