What is HUSD (HUSD)?
HUSD is a stablecoin that was launched by Stable Universal and Huobi. As a stablecoin, it has its value pegged to the US dollar. This means that the HUSD price for one token is equal to $1. It’s a multi-chain asset that’s available as an ERC-20, TRC-20, CRC-20, and HECO token.
HUSD can be used as a tool to standardize stablecoins and make them accessible cross-chain. It allows users to easily convert HSUD to other stablecoins, including USDP, TUSD, and USDC, to enable seamless and secure trading.
What is the Story Behind HUSD?
Huobi initially launched HUSD back in October 2018. Around this time, stablecoins were beginning to gain more traction. HUSD was developed not as a traditional USD-backed stablecoin but as an integrated solution for several stablecoins, allowing traders to convert to USDC, TUSD, or other supported currencies without additional HUSD price charges.
Upon launch, HUSD was met with skepticism from its target market, since it was found that the pricing of HUSD lacked transparency. Furthermore, seeing the issues faced by Tether and Bitfinex, Huobi made the decision not to issue a stablecoin that was tied to the exchange.
Instead, the HUSD project went to the crypto startup Stable Universal. The stablecoin is the company’s main product. Stable Universal’s CEO is Frank Zhang who also acts as the chairman of the Huobi Trust board.
The HUSD team also includes Stable Universal’s senior overseas operations manager Claude Gu and compliance director Shi Deng. Gu previously worked in the social media department at Lenovo. Shi Deng also acts as the chief compliance officer at Huobi.
The HUSD coin was officially relaunched in July 2019, with the Paxos Trust Company acting as its asset custodian. It was first listed by Huobi. By the end of 2019, less than half a year after the relaunch, the HUSD market cap peaked at over 111 million dollars, and 12 trading pairs were added to the market.
Since the launch, the asset has not experienced issues maintaining its peg and the HUSD price remained at $1, over- and undercollateralizing as required. It’s also been focused on providing more transparency to the customers than the first iteration of the token from 2018. As of June 2021, the custodian reserves are maintained by Huobi Trust Company.
What Are the Features of HUSD?
There is no set maximum supply of HUSD tokens as the asset depends on the backing provided by Huobi Trust. The circulation fluctuates based on how much collateral is taken in or out of the reserve. The HUSD price is set to permanently match the value of the USD.
As a stablecoin, HUSD is considered to be a low volatility asset. It uses fiat currency as its collateral. Additionally, each month, the collateral reserves are audited to ensure that the supply of the digital currency matches the fiat assets. This ensures that all assets are evenly distributed, accessible, and interchangeable.
Users that wish to redeem the stablecoin, regardless of the HUSD price value for the transaction, must first send their tokens to a designated wallet address that is held by Stable Universal. Then, then HUSD coins are converted to fiat currency and transferred to the bank account that the user has provided.
While HUSD was initially built as an ERC-20 token, it also supports other token standards, including Tron, HECO, and Cube. This allows for better interoperability and wider applicability of the asset. HUSD can be applied to smart contracts and DeFi applications.
The stablecoin is primarily used to pay for various goods and services. Thanks to its stability, the HUSD price can substitute dollar-based purchases on platforms that support crypto transactions.
HUSD is compliant with US regulations for cryptocurrencies. Users that wish to deposit on the platform must pass the identity verification process and comply with the Know Your Customer (KYC) requirements. This is done to make sure that the asset supply is transparent and accurate.
HUSD is also Anti-Money Laundering (AML)-compliant. Due to the asset management and the KYC regulations, HUSD is not considered an anonymous network. Nevertheless, the asset is completely decentralized. The HUSD crypto network is secured using the Proof-of-Reserves system, which guarantees complete collateralization of assets.
