The HUSD team explained that the drop in rates was because the market maker account was closed, causing liquidity problems.
The HUSD stablecoin, issued by Stable Universal, is back to the $1 peg after dropping 8% on Thursday.
In a tweet on Friday, HUSD said the drop in value was associated with the closure of several accounts, including market maker accounts. The coin’s market capitalization, which fell to $136.3 million on Thursday, is now back at $160 million.
Stablecoins are cryptocurrencies designed to hold value against other assets, usually fiat currencies like the dollar or euro. TerraUSD (UST), an algorithmic stablecoin with a market cap of $18.71 billion, collapsed earlier this year. HUSD is cash-backed, which means that every token issued is backed by a dollar in the bank.
“We have taken the decision to close a number of accounts in specific regions to comply with regulatory requirements, including some market maker accounts. Due to time zone differences during business hours. banking, this resulted in a short-term liquidity issue but was later resolved,” HUSD said in a tweet.
Cryptocurrency exchange Huobi said that it was working to resolve the issue, revealing that the peg was restored within 12 hours.