Cash-Backed HUSD Stablecoin Loses Peg, Drops to 92 Cents
The stablecoin is trading as low as 89 cents against USDC on Curve Finance.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/3QKB5GLKGJAXRBZ4GOEAK2MECM.jpg)
HUSD has dropped below its 1:1 peg to the U.S. dollar. (Josh Appel/Unsplash)
The HUSD stablecoin, which is issued by Stable Universal, has fallen to 92 cents, an 8% drop from its planned $1 peg, according to CoinMarketCap prices.
It is trading as low as 89 cents against the USDC stablecoin on decentralized finance (DeFi) protocol Curve Finance. The so-called depeg occurred 16 days after crypto exchange FTX removed HUSD from its basket of support USD stablecoins.
A stablecoin is a cryptocurrency designed to hold its value against another asset. This can be in the form of algorithmic stablecoins or reserve-backed coins, of which HUSD is an example. The stablecoin sector has been under intense regulatory scrutiny this year following the implosion of algorithmic stablecoin terraUSD (UST), which saw $18.71 billion evaporate alongside the collapse of Terra's LUNA token.
A year ago, HUSD published a breakdown of reserves that showed every issued token was backed by U.S. dollars held in cash in money market accounts. At press time HUSD has a market cap of $149.5 million.
HUSD is issued by Stable Universal and can be redeemed on a 1:1 basis against the U.S. dollar, according to the company's website.
Typically, when redemptions are live the price will gravitate toward the peg because if it's lower, traders can purchase tokens at a discount on an exchange and redeem for a full dollar through the company's website.
Stable Universal did not immediately respond to CoinDesk's request for comment.
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.