Is Tether (USDT) stable?
Another day, another piece of no so great [Tether (USDT)](https://en.wikipedia.org/wiki/Tether_(cryptocurrency)) news. As reported by [Modern Consensus](You https://modernconsensus.com/cryptocurrencies/tether/noble-funding-cash-tether/), it appears that one of the banks (Noble Bank) that stands behind Tether is in a bit of trouble. Hopefully, it is a temporary thing that will pass quickly, but it isn’t a great sign for a stablecoin that is supposed to be backed 1:1 by the US Dollar.
Also contained in the article is this unsourced quote:
> A top person at a major trading crypto desk has told Modern Consensus that one counterparty has been trying to unload “tens of millions of tethers” without successfully finding a counterparty.
The idea that Tethers (USDT) are not being bought does strike at the heart of their usefulness as a crypto stablecoin. The idea of Tether was that it was a useful retreat against times of declining crypto prices (has anyone seen one of those bear markets this year?), where you could cash out your crypto at a relative high and store them in USDT without withdrawing all the way back out to the fiat system (with associated financial and time lag costs).
Tether has had issues before, over transparency and questions over whether or not it’s tokens were actually backed by US Dollars. In fact, they have not yet undergone a public financial audit, as their employed auditor withdrew from the job after it found that it could [not complete the audit](https://www.bloomberg.com/news/articles/2018-06-20/tether-hired-former-fbi-director-s-law-firm-to-vet-finances).
If traders and investors (and exchanges) can’t trust this current backbone of the crypto system, where will everyone be turning to? At the moment, Bitcoin (BTC) is still way too volatile to serve that role, although perhaps in the future it is the eventual safe harbour against ill trading winds. It is notable that a number of new stable coins have launched recently, backed by fiat reserves or other physical assets (we even have our own homegrown SBD, which for the last few months seems to have stayed pegged to the USD!). For the moment, I guess there is going to be a bit of caution with trading against Tether and the newer stablecoins, until we truly know what is going to prevail, luckily the market isn’t in total freefall anymore and so BTC and ETH pairs are looking better than any other time in the year (not counting January…)!