Capital Union: Tether’s partner bank enters the crypto world

Capital Union has started offering crypto trading and custody services to its professional clients.

Capital Union enters the crypto world 

The bank is based in the Bahamas, and holds part of the reserves of Tether, the company that issues and manages the world’s largest stablecoin (USDT). 

A Capital Union spokesperson revealed that the bank is working with selected cryptocurrency exchange platforms and liquidity providers, as well as custodians and technology providers. In this way they can support a wide variety of digital assets and in turn offer exchange and custody services to their customers. 

The spokesperson revealed that crypto services are still a rather small part of its business, as the bank remains mainly focused on traditional investment and asset management services. As a regulated bank, it now also offers crypto services to financial institutions, financial intermediaries and professional investors.

Among other things, he also said that Capital Union does not have a specific view on how crypto markets, or cryptocurrencies themselves, might evolve, and that they are merely enabling their professional clients to be able to trade this new asset class, as part of their forward-looking business strategy. 

However, he stated that Capital Union expects blockchain to significantly disrupt the financial sector, revealing that the bank has been actively working on developing transactional capabilities that take advantage of this new technology. 

So, while from a strictly financial point of view they are not unbalanced, from a technological point of view they are ready to exploit the benefits brought by these innovations. 

Capital Union is a relatively new bank, as it was founded in 2013 (Tether is from 2014), and by the end of 2020 it already managed around $1 billion in assets. 

The relationship between Capital Union and Tether

The Bahamas was chosen as the location because it was one of the first nations to adopt the regulatory framework known as the DARE Act, in 2020.

Tether was also previously based in that part of the world, namely the Caribbean islands, so there are several coincidences that could have created opportunities for the two companies to meet. 

What is not precisely known, however, is the amount of USDT reserves held by Tether at Capital Union in the Bahamas. What is certain is that the more than $82 billion that was available to Tether as reserves as at 31 March 2022 is deposited in various institutions.