Fearing a banking crisis, stablecoin moves $1 billion to the Bahamas

The stablecoin industry is undergoing major changes due to the banking crisis plaguing the US. A good example is the relocation of more than $1 billion from TrueCoin, the issuer of TrueUSD (TUSD), to the Bahamas.

That’s why TrueUSD wants to avoid what happened to one of its biggest rivals, USDCoin (USDC). As a reminder, the USDC lost its peg to the dollar last week after it was announced that $3.3 billion was tied up in Silicon Valley Bank.

In addition, risk mitigation may also involve US regulators. After all, the stablecoin crisis started back in February, when the New York Department of Financial Services banned the issuance of Binance USD (BUSD).

Dollar-backed but off-chain US banks

Despite being famous, TrueUSD (TUSD) was a small stablecoin earlier this year, with a market cap of just $755 million. However, the BUSD, USDC and DAI crisis caused TUSD reserves to skyrocket to over US$2 billion.

Of this $2 billion, the real-time report indicates that $1.43 billion is in the bank of the Nassau Union in the Bahamas.

The strategy is clearly an escape from the US banking crisis. After all, before that, the publisher of TrueUSD used American banks such as Signature and Silvergate, both closed and SVB.

Tether (USDT) is also benefiting from the crisis

Another stablecoin that benefits from this scenario is Tether (USDT), which has previously received a lot of criticism. Since the start of the year, USDT has gained $7.3 billion in market cap, reaching $73.4 billion this week.

Still, information about Tether is scarce. Paolo Ardoino, CTO of Tether, only noted on his social media that his stablecoin was not exposed to Signature, SVB or Silvergate.

Therefore, it is possible that Tether is using the same strategy as TrueUSD, which is to choose foreign banks to handle the billions that back its stablecoin.