The TrueUSD stablecoin (TUSD) was trading at US$1.20 on Monday (1) at an unusual time for the market. After all, when stablecoins lose their peg to the dollar, it’s usually on the downside.
The reason for the increase could be linked to a promotion from Binance, the largest exchange in the market. After the forced shutdown of its own stablecoin, BinanceUSD (BUSD), exchange Changpeng Zhao is promoting TUSD.
Therefore, its small size compared to other giants may have influenced the price. Despite the high, the movement is not a good sign as the function of a stablecoin is to remain stable.
Stablecoin TrueUSD (TUSD) reaches USD 1.20
When a stablecoin is said to have lost its peg to the dollar, it is cause for concern for any holder of the coin. After all, this usually means that the stablecoin is worth less than it should be, such as with TerraUSD (UST) in 2022 and more recently with USDCoin (USDC) and Dai (DAI).
However, TrueUSD (TUSD) went through the opposite (1) on Monday. For example, on Binance’s books, the stablecoin peaked briefly at $1.20.
The reason can be linked to the launch of the Sui cryptocurrency (SUI). Basically, Binance gave SUI to everyone who deposited BNB and TUSD into their new farm program.
Due to the low liquidity of the small TUSD, the market ended up trading the stablecoin at a premium price. Another cryptocurrency that went through a similar situation was Bitcoin itself, which traded for US$56,500 on the Bitfinex brokerage this Tuesday (2).
The Stablecoin industry is undergoing major changes
As long as their prices are stable, barring rare exceptions like this, the stablecoin market always seems to be the same. However, a lot is happening in this industry.
For example, the largest stablecoin in the market, Tether (USDT), is about to return to its all-time high in market value after a crisis of mistrust that lasted about a year.
The reason for this resumption was the ban of BinanceUSD (BUSD) by the US, as well as the banking problems of its biggest rival, USDCoin (USDC). Since March, USDC has already lost $14 billion, about 14% of its deposits.
Finally, TrueUSD (TUSD) itself is another one that is growing. Now the fifth largest stablecoin in the market, TUSD alone has tripled its size by 2023. One of the biggest reasons would be the strategy of avoiding US banks, but Binance’s support also seems to help growth.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
