Tether Saves Reserve Funds At Capital Union, Here's The Statement From The Bank

Tether keeps a reserve fund at Capital Union. (photo credit: Cryptomonedaz)

JAKARTA – The issuer of stablecoin Tether (USDT) is reported to have kept its reserve funds in a small bank located in the Bahamas. The bank is Capital Union.

According to a report from Cointelegraph, Capital Union is a Bahamas-based bank that has been actively involved in the cryptocurrency industry. The banking institution has launched crypto trading and storage services to its professional clients as part of the bank's trading services.

“We work with select trading venues and liquidity providers and several custodians and technology providers, which allows us to support a wide variety of digital assets as part of our trading and storage services,” a Capital Union spokesperson told Cointelegraph on Tuesday.

Meanwhile, the crypto services at Capital Union are said to be a small portion of its business that focuses on providing wealth management and investment services. However, a spokesperson for the bank did not go into detail about what cryptocurrencies are supported by Capital Union.

“We do not have a directional view on the crypto market or on a specific coin but as a forward-looking financial institution has chosen to enable our professional clients to trade in this new asset class if they wish to do so,” a Capital Union spokesperson added.

On the other hand, Capital Union is also reportedly actively developing blockchain-related capabilities for transactional purposes. The reason is, the bank claims this can provide significant disruption to the financial industry.

Regarding Tether's reserve funds held at the bank, Capital Union refused to confirm and denied the bank's involvement with Tether's crypto operations on the grounds of confidentiality.

For your information, Capital Union was founded in 2013, and manages $1 billion worth of assets by the end of 2020. The bank partnered with Chainalysis in April 2022 to ensure the secure and compliant rollout of its crypto solutions such as trading and custody. According to a bank spokesperson, the Bahamas was one of the first countries to adopt the regulatory framework known as the DARE Act in 2020.

“As a locally regulated bank, this allows us to offer our clients crypto-related services, of a financial, institutions, financial intermediaries and professional investors,” said a Capital Union representative, as quoted by Cointelegraph.