Bitfinex and Tether Secure New Banking Partnerships
Bitfinex and Tether recently announced new banking partnerships in Hong Kong and the Bahamas, respectively. Previously, both companies, who reportedly share the same management, were clients of the Noble Bank, which is currently up for sale due to financial troubles.
Bitfinex Says Banking Details Are Commercially Sensitive and Confidential
According to The Block, Bitfinex has secured a new banking partner in Hong Kong. Inside sources revealed that the cryptocurrency exchange set up an account with Bank of Communications with Citibank acting as a go-between for U.S. dollar wire deposits.
Oddly enough, HSBC Holdings owns a stake in the bank. Recently, speculations emerged that despite earlier reports of a banking relationship between the exchange and HSBC, the latter closed such accounts having been initially unaware that it was facilitating wire deposits for the former.
Presently, there isn’t any indication whether Citibank is aware of the arrangement. For its part, Bitfinex doesn’t appear keen on throwing more light on the matter. On the platform’s website, the exchange declared that its banking details are “commercially sensitive and confidential.” The company also says that any attempts to publicly disclose such information might be damaging to the cryptocurrency market.
Tether Reportedly Banking in the Bahamas
In a separate article, Larry Cermak, writing for The Block, said that Tether had also finalized its banking partnership with Deltec Bank, who is based in the Bahamas. Anonymous sources revealed that both entities reached an agreement in recent weeks and that a few over-the-counter (OTC) trading desks want to create accounts with the bank as well.
Presently, Tether has more than $2.2 billion worth of USDT in circulation with a market capitalization of $2 billion. Each USDT token is supposed to be “tethered” to $1, meaning that Tether supposedly holds $2.2 billion in its banking reserve.
Bitfinex/Tether Saga Continues
The new banking partnerships announced by both companies is the latest development in an ongoing saga that could have severe repercussions for the market as a whole. Recently, Bitfinex was forced to halt fiat deposits. This move caused a Tether meltdown which saw hundreds of millions of USDT taken out of circulation as traders sold the stablecoin in exchange for Bitcoin, Ether, Bitcoin Cash, and Litecoin.
The massive sale caused a temporary price rally that almost took Bitcoin above the $7,000 mark. Presently, USDT is trading at $0.97, according to Coinmarketcap. Perhaps the new banking partnerships will bring about some stability in both the Bitfinex and Tether operations.
Will these two announcements halt the USDT meltdown that has seen the stablecoin plunge significantly? Let us know your thoughts in the comment section below.
Image courtesy of Bank of Communications and Shutterstock.