Tether’s Bahamas Banking Move: Selects Britannia Bank & Trust for Dollar Transfers

<p>Tether has turned its focus to the Bahamas-based
Britannia Bank &amp; Trust for processing dollar transfers. This step occurs as
the traditional US banks cut ties with the cryptocurrency entities. In the
past, Tether has faced questions regarding the reserves that underline its
stablecoin, USDT.</p><p>Tether Taps Britannia for Offshore Connection </p><p>According to the sources who spoke to Bloomberg on condition of anonymity, Tether had instructed clients
to send their funds to Britannia’s bank accounts in recent months. However, it
remains unclear when the banking relationship began.</p><p>Tether, the issuer of
the world’s most widely used <a href="https://www.financemagnates.com/terms/s/stablecoin/">stablecoin</a>, has long grappled with securing and maintaining
access to the traditional financial system. The relationship between the
stablecoin sector and traditional banking has often been a tenuous one, with Wells Fargo cutting ties with Tether in 2017.</p><p>The mounting pressure
from regulatory bodies, including the Securities and Exchange Commission (SEC),
has reportedly led to the withdrawal of major and midsize banks from the crypto
sector. Additionally, the collapse of prominent financial institutions,
Silvergate, Signature, and Silicon Valley Bank, which were considered crypto-friendly, has led banks to
rethink their engagement with the crypto companies.</p><p>One of the most pressing
questions surrounding Tether revolves around the nature and location of its
reserves. Tether claims to have USD $86
billion in assets backing its stablecoins, but the alleged lack of transparency
about its banking relationships has raised concerns.</p><p>Regulatory Pressure
Drives Banks Away</p><p>The mainstream banking sector’s wariness toward crypto clients
has been exacerbated by a string of high-profile collapses, such as the <a href="https://www.financemagnates.com/cryptocurrency/troubled-ftx-files-for-bankruptcy-as-ceo-bankman-fried-resigns/" target="_blank" rel="follow">bankruptcy
of FTX</a>, combined with a lack
of regulatory clarity. According to Reuters, major banking institutions like JP
Morgan, Bank of America, and Citigroup are becoming more cautious in engaging
with crypto firms, preferring to cater to established players like Coinbase.</p><p>About a week ago, Tether
released its transparency report, highlighting a combined surplus of USD $3
billion in shareholder capital cushion. These reserves are distributed across
15 different <a href="https://www.financemagnates.com/terms/b/blockchain/">blockchain</a> ecosystems. Additionally, Tether’s total assets of USD
$86 billion have exceeded its total liabilities of USD $82 billion.</p><p>Tether’s diverse
stablecoin offerings, including Tether Gold (XAUT), Tether (EURT), Mexican Peso
Tether (MXNT), and Tether Chinese Yuan (CNHT), differ in their liquidity
cushion arrangements. While USDT enjoys a substantial cushion, these other
stablecoins lack the same level of backing, according to the report by the
company.</p><p>Tether
reported a substantial net profit of USD $1.48 billion <a href="https://www.financemagnates.com/cryptocurrency/tether-holds-more-gold-than-bitcoin-as-q1-profit-swells-to-148b/" target="_blank" rel="follow">for
Q1 2023</a>,
doubling its earnings from the previous quarter, which stood at USD $700
million. This remarkable surge in profits was accompanied by an increase of 20% in
the circulation of Tether’s token, <a href="https://www.financemagnates.com/cryptocurrency/troubled-ftx-files-for-bankruptcy-as-ceo-bankman-fried-resigns/" target="_blank" rel="follow">Finance
Magnates</a> reported.
Additionally, Tether unveiled USD $1.5 billion in Bitcoin and USD $3.4 billion
in gold reserves.</p>

This article was written by Jared Kirui at www.financemagnates.com.