The USD Dollar backed digital asset, Tether (USDT) relies on Noble Bank for its Dollar backing, and the bank is in serious trouble. Tether is grappling with the news of Noble Bank’s insolvency. The entire crypto community is moving with caution as it may have potential repercussions for the crypto ecosystem. Some people in the community are dismissing the allegations of insolvency as baseless.
The news of Noble Bank insolvency is featured in the Modern Consensus Blog citing unidentified sources, so take it with a grain of salt. The startup Bank, based in Puerto Rico is one of the banks that literally tethers Tether to US dollars. The insolvency of Noble Bank if true is likely to put a dark spot on the future of stable coin Tether.
Noble Bank in Need of Funds to Stay Afloat?
Noble Bank is reportedly searching for funds to stay afloat. Its main income source is from Tether. The efforts to raise funds for the survival of the largest stable coin holder may have failed. According to the Wall-street Journal, Noble Group has insolvency problems relating to the trading business of commodities.
Tether Moves on Good Trading Volume
Despite the unconfirmed news of Noble Bank insolvency, Tether is commanding good volumes. Its volume is 3 times higher than Ether (ETH). Higher volumes of Tether supports trading of BTC. Noble Bank is the main reserve bank of this stable cryptocurrency token. The earlier stint of John Betts, Chief Executive Officer of Noble Bank, is with Brock Pierce, the co-founder of Tether, before establishing these firms.
Tether is also rumored to be purchasing cryptocurrency using the defective tokens that don’t have US dollar backing. It is also rumored that Tether sold $5 million worth of these positions on Kraken, the cryptocurrency exchange. The users can sell the USDT in Kraken to turn it into fiat cash. Its troubles were further aggravated with the recent launch of the stable coins Paxos, Gemini Dollar, and USDC. Circle has introduced these legalized stable coins creating troubles for the stable token – Tether. According to the latest news, Tether is now trading at $0.99. It is an unusual sign for the dollar-backed token. Tether is likely to face increased pressure due to the rumors surrounding Noble Bank.
