Following the strengthening of the dollar peg for the HUSD stablecoin, the cryptocurrency exchange Huobi provided customers with an overview of the short-term liquidity problem and informed them that the issue had been fixed.
On August 18, the value of HUSD began to decrease in respect to the value of the dollar, beginning the day with a trading price of $0.92 and reaching a low of $0.82 a few hours later.
The cryptocurrency trading platform made an instant announcement in response to the concerns that they had spoken with the stablecoin issuer, which was named Stable Universal Limited, and that they were trying to restore the stability of the cryptocurrency. The Ethereum-based stablecoin almost regained its dollar peg before the conclusion of the trading day, reaching a price of $0.99 per HUSD before returning to its previous level of $1 on Friday.
According to the HUSD team, the depeg occurred because a decision was made to comply with rules by closing market maker accounts in certain locations. The team claimed that the disparity in the hours that banks are open had resulted in a gap, which in turn led to a difficulty with liquidity, which resulted in HUSD deviating from its peg.
Huobi afterwards reassured its consumers via a statement that the problem had been totally resolved. The exchange also reminded its users to pay careful attention and be aware of any possible hazards that may arise as a result of the volatile nature of the market.
When one of the funds that had profited from the TerraUSD (UST) depeg began to aggressively move enormous quantities of USDD in June, the USDD stablecoin also dropped off its dollar peg. This occurred as a result of the fund’s activity. Nevertheless, the depeg did not endure for very long since the Tron DAO Reserve quickly raised 700 million USD Coin (USDC) to preserve the peg.