HUSD: Huobi Rolls Out Unified Stable Coin Solution
The introduction of Tether as the first stable coin, into the cryptocurrency ecosystem was meant to bridge the cryptocurrency world and the legacy financial system by offering a digital token with stable value. The idea behind stablecoins is fairly simple, to create non-volatile digital tokens pegged to the USD and backed by fiat in a bank account; as such they can be redeemable to dollars on a 1:1 basis on demand. Unsurprisingly, Tether’s first mover advantage affords it a unique status, perhaps too important, in the crypto ecosystem; being used as one of the base currencies along with Bitcoin and Ethereum in cryptocurrency exchanges today.
Tether has an infamous history of controversy ranging from its relationship with Bitfinex and its banking parent to lack of transparency of its audit. For a while, FUD(fear, uncertainty, doubt) about Tether has been highlighted only until the next big story or market movement that captures the market’s attention. The recent episode in Tether’s shady history, Tether’s insolvency, led Tether to the brink, with the value dropping to as low as $0.84 and creating a premium on some exchanges such as Bitfinex. The market reaction to this black swan event : traders moving their funds from Tether(which is the preferred base currency in cryptocurrency bear markets due to its price stability) to Bitcoin and other cryptocurrencies, fearing imminent Tether implosion, causing a temporary price spike across the markets.
Most people take a lukewarm ‘This too will pass, we’ve been here before’ approach every time Tether FUD comes out and they appear right when things return to normal. However, today the power of fake news is stronger than ever, and even if the allegations might be untrue, the damage can be severe. Despite the smoke on Tether ‘clearing’ with the price stabilizing back to normal levels, this time there has been a long overdue response to the elephant in the room from various industry stakeholders. The recent influx of regulatory approved Tether alternatives such as Gemini Dollar, Pax and True USD promise more transparency and stability and also bring to the fore preceding overlooked alternatives such as DAI.
In a collaborative show of unity, most of the top exchanges including Huobi, Binance and OKEX, have promptly listed these stablecoins and offer them as trading pairs across many cryptocurrencies. This shows commitment to customer safety first, thereby improving traders’ confidence.
HUOBI SOLUTION: HUSD
Too many options might be a mouthful for investors, that is why Huobi Pro has gone a step further to offer a universal stablecoin solution for its users, HUSD. Most investors will be satisfied with the user-friendly HUSD that is backed by Huobi Global, the leading global digital asset exchange. Huobi Pro has always taken the customer interests seriously with measures such as cold storage of assets and Huobi Security Reserve Fund to name a few.
The HUSD Model
As a trader, you can deposit any of the four recently listed stablecoins PAX, TUSD, USDC and GUSD. And while trading you no longer have to choose between multiple stablecoins. Likewise, you can also withdraw in the stable coin of your choice after your trading activity. This also saves costs over the long run.
The rollout of HUSD, will be in phases, according to the official Huobi announcement:
1. The deposit service of PAX, TUSD, USDC and GUSD will start at 16:00, October 19 (GMT+8 ).
2. USDT/HUSD trading pair will be listed at 10:00 AM, October 22 (GMT+8) on Huobi Global.
3. Transfer service of HUSD between Huobi OTC and Huobi Global will start at 10:00 AM, October 22 (GMT+8), and trading services of HUSD on Huobi OTC will start at 10:00, October 23 (GMT+8).
4. Huobi Global will commence BTC/HUSD and ETH/HUSD trading at another time after evaluating market conditions.
5. Huobi App will support the trading service of USDT/HUSD, and the deposit and withdrawal services of HUSD will be available in the next App version.
6. Huobi Global will start the withdrawal services of the stablecoins in one to two weeks. The specific time and date will be notified via a separate announcement.
Since the official announcement of HUSD launch, the news has received broad-ranging support from the projects Gemini USD, Pax and USDC who have also spread the news through their official Twitter platforms.
Questions still linger over the reliability of most of these upcoming stablecoin alternatives with contrarians and critics leveling allegations of centralized backdoors that can allow for token freezing, going against the ethos of the cryptocurrency space; perhaps we are not out of the woods yet. Watching from the sidelines, I realize that competition among stablecoins as future financial instruments is heating up and we will be able to determine the impact of this pivotal moment in retrospect. To stress this point further, I believe HUSD’s support of stablecoins is going to play an even important role, when we connect the dots in a few years. Whether or not this is the silver bullet to Tether woes remains to be seen, however, I believe this is a novel moment when what might appear as a small step in isolation is big for the whole ecosystem.
For more information on HUSD launch, you can visit the official Huobi blog here