USDD Stablecoin Loses Bitcoin Backing, Raising Concerns About Stability USDD Stablecoin Loses Bitcoin Backing, Raising Concerns About Stability The USDD stablecoin has lost its Bitcoin backing, with its collateral address withdrawing approximately 12,000 BTC, valued at around $726 million. The majority of the stablecoin is now backed by TRX, the native token of the Tron …
USDD Stablecoin Loses Bitcoin Backing, Raises Stability Concerns
USDD Stablecoin Loses Bitcoin Backing, Raising Concerns About Stability
The USDD stablecoin has lost its Bitcoin backing, with its collateral address withdrawing approximately 12,000 BTC, valued at around $726 million. The majority of the stablecoin is now backed by TRX, the native token of the Tron blockchain.
Justin Sun, founder of Tron, took to social media platform X (formerly Twitter) to address the situation, explaining that the decision was not mysterious and comparing it to the operations of MakerDAO, another decentralized finance (DeFi) project.
The withdrawal of Bitcoin from the collateral mix has raised doubts about the stability and trustworthiness of the stablecoin. At present, USDD has a market capitalization of approximately $744 million, placing it 96th in the global ranking of cryptocurrencies by market cap.
TRX, which is now the primary support for USDD, is currently trading at $0.15 and has an estimated market value of $13.5 billion. TRX’s value has risen by more than 100% in the last year, prompting concerns about the potential impact on USDD holders and the cryptocurrency market.
Stablecoins, which aim to maintain a stable value attached to fictitious currency, are typically supported by supplementary assets to uphold confidence and stability. The elimination of a significant portion of the reserve, specifically Bitcoin, could cause doubts about the stability of USDD.
It remains unclear how the market will react to this development, and whether the TRON DAO Reserve’s efforts to enhance USDD will help restore confidence in the stablecoin. Those who own USDD and TRX will be keeping an eye on this situation.
This development underscores the significance of stablecoins in providing a secure source of value to the cryptocurrency market. To maintain trust in these critical assets, stablecoin issuers must prioritize transparency, stability, and trustworthiness.
As the market shifts, we will continue to monitor and provide updates on any developments related to USDD and the TRON DAO Reserve.
Subscribe to Our Newsletter
Keep in touch with our news & offers
Thank you for subscribing to the newsletter.
Oops. Something went wrong. Please try again later.