Earlier today, the depegged algorithmic stablecoin TerraClassicUSD (USTC), founded by Do Kwon recorded a substantial rally of about 15% after CZ Binance wrote a comment regarding the asset.
Notably, this surge in the price of USTC came amid the market-wide correction, triggered by the recent regulatory clampdown on the stablecoin BUSD, wholly owned by Paxos.
The entire fiat-backed stablecoin market seems to be at risk following the latest regulatory attack on the Binance-branded stablecoin BUSD, issued and managed by a top centralized crypto trading platform, Paxos.
On Sunday, the United States Securities and Exchange Commission (SEC) threatened Paxos with a lawsuit over BUSD. Shortly after this, the New York Department of Financial Services (NYDFS) per a public alert “ordered Paxos to cease minting Paxos-issued BUSD as a result of several unresolved issues related to Paxos’ oversight of its relationship with Binance regarding Paxos-issued BUSD”.
From the foregoing, a top crypto analyst stressed the need for a stablecoin that is not fiat-backed. That is an algorithmic-based stablecoin that is likely beyond the reach of regulators. TerraClassicUSD (USTC) formerly known as TerraUSD (UST) is a typical example of an algo-based stablecoin. Unfortunately, the asset depegged in May 2022, losing parity with the dollar.
According to a widely followed crypto pundit and DeFi enthusiast, Miles Deutsche, USTC had the right vision but was managed poorly by Do Kwon and TerraForm Labs. He said, “UST (now USTC) had the right vision all along.” “It was just executed poorly. But the need for a robust decentralized stablecoin hasn’t gone away,” he added.
Among those who reacted to this Monday tweet was Changpeng Zhao (CZ), the CEO of Binance and founder. CZ Binance admitted that the idea behind the supposed stablecoin TerraClassicUSD (USTC) is what the current crypto industry needs, considering the growing attack on fiat-backed stablecoins. “Sad but true,” was the response from CZ.
At the time of writing, USTC is trading for $0.03 per coin with a 1.3% decline in the last 24 hours.
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