Last week, crypto-currency exchange Huobi decided to delist the HUSD stablecoin. Since then, the HUSD stablecoin has lost its dollar peg by nearly 72%, falling to a low of 28 cents.
In the past 24 hours alone, HUSD has fallen 58% and is currently trading at 31 cents amid massive sell orders in the market. However, crypto-currency exchange Huobi said users can still trade HUSD tokens for Tether (USDT), the largest stablecoin in terms of market capitalization.
Stablecoins have been very popular in the market recently and are designed to mirror the value of fiat currencies. Some of the most popular stablecoins on the market currently reflect the U.S. dollar.
However, the stablecoin market was fairly shaken up by the collapse of the stablecoin TerraUSD (USDT) earlier this year. The collapse of Terra caused an implosion of over $60 billion. Terra USDT was an algorithmic stablecoin linked to Terra’s native cryptocurrency, LUNA.
Issued by Stable Universal, the HUSD stablecoin also ran into some problems earlier this year as it began to fluctuate against the dollar peg. However, one of the immediate changes it undertook was to move volume to its own stablecoin USDD.
Note that Huobi is not the one who issued the HUSD stablecoin. However, it has been quite active in marketing the token since its launch in 2018. Currently, the market capitalization of HUSD is $63 million. It has dropped significantly from the market capitalization of $1 billion last year to 2021.
The official announcement of Huobi
In an announcement last week, crypto-currency exchange Huobi said:
“As part of our ongoing efforts to promote the healthy development of the blockchain ecosystem, Huobi Global will discontinue the HUSD trading service and delist HUSD in accordance with Article 11 of Huobi Global’s Token Management Rules. The discontinuation of the service and delisting of HUSD will commence at 08:00 (UTC) on October 28, 2022. In the meantime, users’ HUSD assets will be converted into USDT assets at a ratio of 1:1.”
Huobi said the completion of the conversion of HUSD to USDT will take place before November 4. Earlier this month, About Capital Management announced it is taking a majority stake in Huobi Exchange, with the exchange selling all of its shares. However, this transaction will have no impact on Huobi’s core operations and business management teams.