Huobi Clarifies What Went Wrong With HUSD Following Stablecoin’s Comeback

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Last Updated on August 19, 2022 by Bitfinsider

Crypto exchange Huobi gave users assurance that the short-term liquidity issue had been fixed after restoring the dollar peg for the HUSD stablecoin.

HUSD began losing value on Thursday, trading at $0.92 at the beginning of the day and dropping as low as $0.82 a few hours later. Members of the community were disturbed by this and began to make predictions about what may occur if the stablecoin lost its dollar peg.

The stablecoin issuer, Stable Universal Limited, was contacted by the cryptocurrency trading platform in response to the worries, and it was reported right away via Twitter that efforts were being made to restore stability. Before the day was out, the Ethereum-based stablecoin traded at $0.99 per HUSD, nearly regaining its dollar peg, before returning to $1 on Friday.

Source: Twitter

The HUSD team claims that the depeg was brought on by a move to terminate market maker accounts in particular regions in order to adhere to rules. The team claimed that the gap in banking hours caused by the time difference caused a liquidity issue, which caused HUSD to deviate from its peg.

After assuring its clients through an announcement that the problem had been fully resolved, Huobi recommended its users to exercise caution and to be mindful of any potential hazards resulting from the market’s volatility.

Source: Twitter

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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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