- Tron’s USDD depegs from the dollar mark yet again.
- USDD accounts for 86% of USDD/CRV pool.
- Japan eyeing algorithmic stablecoin restriction.
Stablecoins continue to destabilize the cryptocurrency market, and the latest to drop from its $1 mark is Tron’s algorithmic stablecoin USDD. At the time of writing, USDD is trading at $0.97 and has been concerning crypto users as it has failed to regain its peg over the past few days.
The destabilization of USDD poses risks, especially for the DeFi protocol curve, as data reveals that USDD accounts for 86.10% of the USDD/3CRV pool. If USDD tumbles, that could be a big hit for Curve finance.
Ever since Terra’s UST collapsed, the crypto community has been wary of stablecoins like USDD. This is not the first time that the USDD has lost its peg. When USDD lost its $1 peg last month, Twitter user Lookonchain reported $548 million of its $990 million reserve had vanished. The user presented records of transactions showing that USDD creator Justin Sun sent the $550 million from the stablecoin reserve to three distinct addresses in order to settle loans.
Furthermore, the user also alleged that 99% of the TRX tokens in the USDD reserve were unavailable, implying that the collateral ratio of the USDD stablecoin reserve is only 50%.
Stablecoins’ destabilizing has drawn the attention of regulators all across the globe. Last week, Japanese Vice Minister for International Affairs, Tomoko Amaya, hinted that the nation could be looking to restrict the algorithmic backing of stablecoins.
“The proposed review states that ‘global stablecoins must not use algorithms in stabilizing their value’ and strengthens the ensuring of redemption rights,” Amaya said in a statement.