TrueUSD Depeg Sparks Trading Frenzy on Binance
On January 15, the price of TrueUSD (TUSD), a USD-pegged stablecoin, dropped to $0.985, deviating from its $1 parity. This decline is believed to be a result of TrueUSD holders exchanging their tokens for Tether (USDT), another stablecoin.
According to data from Binance, TUSD experienced an inflow of $301.54 million in the past 24 hours, with outflows amounting to $147.77 million. Market experts attribute these sell-offs and market dynamics to the loss of parity by TrueUSD.
This is the second time in the last two months that TUSD has experienced a significant decline against the USD. In November 2023, it fell to $0.988.
In addition to the loss of parity, TrueUSD has also faced challenges in providing real-time attestations of its reserves. Concerns about undercollateralization emerged on January 10, and a recent report revealed API errors that prevented the stablecoin from providing accurate dollar values for its collateral assets.
These issues were first highlighted by a pseudonymous user on December 16.
Hot Take: TrueUSD Struggles Amidst Depegging Concerns
The recent decline in the value of TrueUSD and its inability to maintain its $1 parity raise concerns about its stability as a USD-pegged stablecoin. The sell-offs and influx of funds into competing stablecoins suggest that traders are losing confidence in TrueUSD’s ability to maintain its peg.
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