HUSD collapsed — another stablecoin is dead

HUSD, or Huobi stablecoin, is collapsed.

Apparently, another fake stablecoin with a fake accounting statement with assets they claimed to be pegged but did not.

To try to become a private central bank, you cannot issue currency as the actual central bank did without assets backing up.

Stablecoin needs assets backing and stable assets with cash on hand. If there are high-leverage financial instruments within the backing assets, stablecoin price tends to deviate. Higher the risk, the higher the deviation.

When the market is in bear, there is no way you can create asset value out of thin air and claim the stablecoin is pegged.

Sooner or later, the market will discover and sell the news.

Plus, the speculation on crypto makes the de-pegged more dramatic.

And that is, I think, what happened at HUSD.

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Photo by Issy Bailey on Unsplash