Cryptocurrencies have been under immense pressure after the collapse of a so-called stablecoin called terraUSD.
Umit Turhan Coskun | Nurphoto via Getty Images
A controversial stablecoin launched just before the collapse of a similar token called terraUSD is struggling to maintain its peg to the U.S. dollar.
USDD, a so-called “algorithmic” stablecoin that’s meant to always be worth $1, plunged to as low as 93 cents on Sunday. The coin’s creator has amassed a reserve of bitcoin and other digital tokens worth close to $2 billion to provide a buffer in case investors flee en masse.
The situation has led to fears that USDD may suffer the same fate as terraUSD, or UST, the wrecked so-called stablecoin that formed part of an experiment called Terra. UST’s meltdown triggered a wider sell-off in cryptocurrencies, which has been exacerbated in recent weeks by a growing liquidity crisis in the market.
The Tron DAO Reserve, which oversees and manages the stablecoin, said a certain degree of...
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