Huobi stops supporting its HUSD stablecoin

The remaining coins of users will be automatically converted to USDT

28.10.2022 - 06:45

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What’s new? On October 28, cryptocurrency exchange Huobi stopped supporting its HUSD stablecoin and delisted it, the company’s website says. All remaining stablecoins of users will be automatically converted to Tether (USDT) stablecoin at a ratio of 1:1. The exchange explained that the decision was made as “part of our continuous efforts to promote the healthy development of the blockchain ecosystem.”

Huobi’s announcement

What is known about HUSD? The centralized stablecoin was launched in 2018. The company decided to create its own stablecoin after noticing problems with Tether (USDT). HUSD based on the ERC-20 standard was used as an aggregator for other stablecoins: TUSD, USDC, PAX, and GUSD. Thus, these coins appeared on Huobi as HUSD. The asset was backed by fiat currency and was audited monthly in the United States.

What happened before? In August, HUSD briefly lost its peg to the dollar, dropping to $0.82. The project’s developers attributed this to the closure of market maker accounts in some regions in accordance with legal requirements. According to them, the time difference in banking hours led to a short-term liquidity problems.

In October, the developers of the NEAR Protocol blockchain stopped supporting their algorithmic stablecoin USN. They explained that the stablecoin became “susceptible to undercollateralization during extreme market conditions,” which could pose risks to investors. The team allocated $40 million to reimburse USN holders.

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