No Stablecoin Is Safe- Huobi USD Drops Almost 20% Below Peg

Huobi's $HUSD is the latest stablecoin to depeg from the dollar. According to CoinGecko, the stablecoin traded for as low as US$0.82 earlier today.

https://twitter.com/btcinchina/status/1560170846236250113

Earlier this year, Huobi exited its stake in the stablecoin and $HUSD is now controlled by Stablecoin Universal.

The liquidity of the cash-backed stablecoin was skewed on decentralized finance (DeFi) protocol Curve Finance where there's more HUSD than its paired tokens (Dai, USDT & USDC).

https://twitter.com/HuobiGlobal/status/1560189622407528448

Huobi confirmed on Twitter that they are aware of the liquidity issues and the stablecoin depeg because Stablecoin Universal was experiencing a liquidity issue.

In under 24 hours, the HUSD dollar peg was restored. At the time of writing, it is trading at almost 1:1 to the US dollar.

https://twitter.com/Stablecoin\_HUSD/status/1560437649256902656

HUSD just announced that due to compliance issues in certain regions, they had to close down a few accounts which resulted in short-term liquidity problems.

FTX may have seen this coming as 17 days ago they just removed HUSD from its own USD basket. User's HUSD deposits will not count towards their USD balance on FTX.

Also Read: Genius or Destructive? MakerDAO Founder Plans To Depeg DAI Stablecoin

[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]

Featured Image Credit: Forkast