Huobi stablecoin HUSD loses peg, dropping to $0.89

Huobi’s HUSD became the latest stablecoin to de-peg from the US dollar. The HUSD stablecoin, associated with the Huobi Global crypto exchange, has fallen to $0.89, an 11% drop from its planned $1 peg, according to CoinMarketCap.

It seems that troubles for stablecoins are yet to be over, despite the crypto market returns on the path to recovery after months of bear attitude and coin crashes. Another one seems to be crashing, and it is HUSD, a stablecoin created by the large and popular crypto exchange Huobi.

HUSD was launched in 2018, according to its profile on Messari, after the Huobi exchange noticed issues with Tether’s USDT, so the exchange decided to create its stablecoin. The ERC-20-based stablecoin was to be used as an aggregate for others like True USD (TUSD), USD Coin (USDC), Paxos Standard (PAX), and Gemini Dollars (GUSD). This way, users could deposit or withdraw any of the four coins, and they would appear on the Huobi exchange in the form of HUSD.

(Source: CoinMarketCap )

HUSD is issued by Stable Universal and can be redeemed on a 1:1 basis against the US dollar, according to the company’s website. 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 $143.9 million.

HUSD is not the first stablecoin that experienced a de-peg. Others like Terra’s UST went through the same ordeal merely a few months ago. The event culminated in the total collapse of the Terra ecosystem after Terra Luna crashed hard. Huobi exchange was among the big exchanges that supported the revival of Terra 2.0. TRON’s USDT also came close to a severe fall but was saved by enough collateral deployed.

Recently, the founder of Huobi Global, Leon Li, was reportedly in talks to sell his majority stake in the company, which could value over $3 billion. According to Bloomberg, Li has held preliminary talks with Justin Sun, founder of the Tron blockchain network, and FTX, the crypto exchange led by billionaire Sam Bankman-Fried, however, it was denied by Huobi later.