Business 2 October 2018

Erik Gibbs

Tether bank ‘desperate for cash’: report

The stablecoin Tether may not be as stable as many have believed—not that this would be a huge surprise to some. It would appear that Puerto Rico’s Noble Bank, reportedly one of the major repositories of Tether, is having serious financial issues. As a bank that supposedly holds a 1-to-1 ratio of Tether to U.S. dollar, the fact that the financial institution is “desperately” looking for cash raises a number of questions.

Noble Bank was first identified as being involved with Tether this past February. Since then, a large number of Tether have been produced. Since each coin must have a physical dollar behind it, the amount of dollars stored in the banks, in theory, should be extremely high.

However, Noble Bank is looking for a serious injection of funds. Two sources close to the bank have indicated that it has already contacted at least one major Tether holder in an effort to unload an unspecified amount of coins, but the holder rejected the request. One of the sources said, “If Noble doesn’t get cash soon, they will only have a few days left. They’re desperate.”

Tether might also be in a bad position. An unidentified source for a major crypto exchange told the crypto media outlet Modern Consensus that a Tether holder has been trying to dump “tens of millions of tethers,” but that the individual has not found a taker. That kind of release at once could have dire consequences on the stability of the stablecoin and could make it obsolete.

There have already been accusations of improprieties among the Tether group. On more than one occasion, reports have surfaced that the company has been releasing tethers that weren’t supported by any asset, and using them to purchase other cryptocurrencies.

Tether is also facing competition from several other stablecoins. Gemini and Paxos have introduced stablecoins recently, both of which are regulated and audited by the New York Department of Financial Services (NYDFS). Tether has been without an auditor since this past January and has made the questionable remark that auditing the coin is an impossibility. It would seem that, if there were one dollar for every tether, an audit would be a relatively simple process to complete. Circle also has introduced its own stablecoin. The coin itself isn’t regulated; however, Circle is.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

COMMENT

latest news

Consensys announces partnership with LVMH, Microsoft

Business 37 minutes ago

Consensys announces partnership with LVMH, Microsoft

Consensys has just announced that they are partnering up with the luxury goods conglomerate LVMH and Microsoft for a blockchain-based platform.

Read More
Crypto in Africa: SA backed digital currency, users get a new app

Business 53 minutes ago

Crypto in Africa: SA backed digital currency, users get a new app

South Africa is looking at developing their own stable coin, and Kudi exchange is looking to expand their services to the continent.

Read More
World Bank, CommBank collaborate to enable secondary bond trading

Business 1 hour ago

World Bank, CommBank collaborate to enable secondary bond trading

The World Bank have joined with CommBank to create a first of its kind process that will be able to record secondary transactions on distributed ledgers.

Read More
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]