Tether Collaborates with Britannia Bank for Dollar Transfers Amidst Industry Scrutiny

Stablecoin issuer Tether has reportedly partnered with Britannia Bank & Trust, a private bank in the Bahamas, for dollar transfers, insiders say, according to Bloomberg.

Although the exact start date remains unclear, Tether recently directed clients to send funds to Britannia's account, confidential sources reveal. Tether's banking relationships are veiled, sparking speculation about how it secures the $86 billion backing its dominant digital currency. This lack of transparency hampers the crypto industry's progress and discourages traditional asset managers, notes Patrick Tan of ChainArgos.

The privately-held Tether has faced challenges accessing the traditional financial system. After Wells Fargo ended its correspondent bank role in 2017, Tether clients had used Signature Bank until its closure. Tether's CTO Paolo Ardoino previously listed partners like Deltec Bank & Trust and Capital Union Bank. In 2021, Tether settled with NY Attorney General over reserve misrepresentation.

Increased US scrutiny has made securing US banking partners tough for crypto firms. The Federal Reserve now watches bank involvement in digital assets closely. Britannia Financial Group, headquartered in London, has been expanding its profile through acquisitions. Julio Martin Herrera Velutini, Britannia's founder, faces charges tied to a bribery scheme.

Tether's total stablecoins in circulation grew 24% this year to $82 billion, while Circle Internet Financial's USD Coin declined.