Popular Stablecoin Tether (USDT) Might See Dark Future With Noble Bank Insolvency Rumors
Popular Stablecoin Tether (USDT) Sees A Gloomy Future With Rumours Of Noble Bank Insolvency
Noble Bank, the Puerto Rico-based startup is said to be struggling to survive and that could have repercussions in the cryptocurrency markets. It is trying to keep afloat and has been frantically searching for funding, according to two highly placed sources, including one at a large cryptocurrency exchange. The bank, with a large chunk of assets coming from Tether’s U.S. dollars, is said to have reached out to at least one large holder of the “stablecoin” in hopes of getting a cash lifeline, but the solicitation was rejected.
The Bitfinex’ed Twitter account, always skeptical of Tether, considers the news a significant sign:
News surrounding Noble Bank’s pending solvency crisis remain unfounded. Still, it is amusing to note that, as of press time, trading volumes of Tether are exceptionally high, slightly lower than those of bitcoin and around three times the volume of the next-most traded crypto, Ether. Those volumes contrast markedly with the pattern whereby trading volume rankings tend to match closely with a crypto’s market cap: the bigger the market cap, the higher the trading volume.
The recent data shows that Noble Bank was the primary reserve bank of Tether. The CEO of Noble bank, John Betts worked with the Co-Founder of Tether, Brock Pierce before the creation of either of the companies. Tether which is reportedly backed by the U.S dollar was recently accused of buying cryptocurrencies with defective tokens which were not backed by the U.S dollar.
That news came only weeks after the Winklevoss twins’ Gemini Trust Company launched their Gemini dollar, approved by the New York Department of Financial Services. The Gemini dollar–or the Winklevii Buck–is pegged on a 1:1 basis with the USD.