The anchored euro (AEUR) stablecoin, which is supposedly pegged to 1 euro, surged nearly 200% Tuesday on Binance after being listed on the crypto exchange yesterday.
The AEUR-USDT pair was trading at around $1.08 for the most part of the day, roughly in line with the EUR-USD exchange rate at the time, Binance trading data shows. The token started to rise sharply at around 17:45 UTC with high volumes, hitting a high of $3.25.
The platform suspended trading with the token due to "abnormal volatility," Binance later said in an X (formerly Twitter) post.
The token's order book – aggregating traders' buy and sell orders – on Binance shows that the last trade was executed at 18:31 UTC at around $2.89, still 167% higher than its intended value.
AEUR is issued by Switzerland-based Anchored Coins, a wholly-owned subsidiary of Singapore investor and former parliament member Calvin Cheng, according to a press release from earlier this year. The token's value is supposed to be backed by euro fiat assets and has a market capitalization of $5 million, the project's website shows.
There was no apparent reason for the unusual price surge. However, the token's low market cap and limited liquidity in theory could make it more vulnerable to de-pegging by potential price manipulation.
The event underscores that stablecoins are prone to periods of price instability on exchanges. Large-cap fiat-backed stablecoins de-pegged in more than 600 instances this year, Moody's Analytics reported last month.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.