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TrueUSD (TUSD) Moves $1 Billion Reserves To Bahamas Due To US Banking Crisis
Key Points:
- TrueUSSD (TUSD) operator Archblock has reportedly transferred $1 billion in reserves to Capital Union Bank in the Bahamas.
- The observed action has been going on since March 10, after its partner bank, Signature Bank, was abruptly closed.
- The action occurred in the context of three banks in the US in crisis and was ordered by the country’s authorities to close.
According to Bloomberg, Archblock oversees about $2 billion in reserves that back its stablecoin TrueUSD (TUSD). After the reserve transfer, Capital Union Bank now holds more than $1.4 billion, a real-time attestation by an independent accounting firm showed Wednesday. This is up from $438 million on March 10.
Archblock began transferring funds after New York-based Signature Bank, formerly Archblock’s largest banking partner, was abruptly shut down by US regulators two days later. It currently has no funds with Signature Bank; attestation shows.
Archblock was founded in 2017 under the name “TrustToken” when it succeeded in making a name for TrueCurrencies (TUSD). September 2022, TrustToken decided to focus on research and development of DeFi products for businesses and financial institutions under a new brand of Archblock.
Alex de Lorraine, Archblock’s chief financial officer and chief operating officer, told Bloomberg News that the decision to move funds to Capital Union in recent days was the result of worsening banking conditions for money businesses electronics in the US.
As mentioned earlier, this month, Silvergate Bank, Silicon Valley Bank, and Signature Bank were shut down or voluntarily dissolved by US regulators. This leaves many digital asset companies in a precarious position as they rush to find new solutions to protect their assets and allow customers to transfer funds.
Circle Internet Financial Ltd. saw its USDC token lose the heaviest dollar value in history after revealing it had deposited $3.3 billion in Silicon Valley Bank.
Before that, Capital Union was also a partner of Tether, whose main cash reserves are located in banks in the Bahamas. Capital Union Bank has been a well-known partner to crypto businesses and allows customers to deposit and trade digital assets in the same account as traditional currencies or assets.
Yesterday, TRU, the governance token of the decentralized lending protocol TrueFi, surged more than 200% in the past hours, according to CoinMarketCap data. A wave of speculation about Binance stablecoins fueled this.
The specific reason is that Binance exchange, the world’s largest cryptocurrency exchange, minted $50 million in stablecoin TrueUSD (TUSD), according to blockchain data. The event has sparked speculation among crypto investors about TUSD potentially getting a bigger role in trading on the Binance exchange following the regulatory crackdown on Binance USD (BUSD) issued by Paxos.
However, the fact that this FOMO token TRU needs to be clarified for many investors. TRU is different from TUSD. In particular, the issuer of TrueUSd and TRU, TrustToken, separated them some time ago.
Therefore, the price of TRU quickly returned to its original state. Currently, the token is trading at $0.97.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Author: Andy
