Will South Korea Oust Tron Foundation\'s USDD After Terra\'s Collapse?
The collapse of Terra\'s LUNA and UST sent shockwaves through the cryptocurrency world, leaving many wary of algorithmic stablecoins. Now, with Tron Foundation\'s USDD attempting to gain traction, concerns are mounting, particularly in South Korea, where scrutiny of crypto projects is intensifying.
South Korea\'s Crypto Landscape After Terra: A New Era of Regulation?
After the fall of Terra’s LUNA and UST, the TRON ecosystem has been on the lookout list of investors. South Korea is grappling with the fallout from the Terra collapse, even leading to a complex extradition battle with the US over Do Kwon. South Korea and the US appear to be competing over the extradition of disgraced Terra founder Do Kwon. Adding to the tension, Hon Chang-Joon, a business associate of Do Kwon, is caught in the middle of the legal proceedings. This crisis has fueled calls for stricter crypto regulation within the country.
USDD: Another Algorithmic Stablecoin Under the Microscope
The newly launched stablecoin USDD, which runs on a similar USDD uses the Tron Foundation\'s native token TRX to help maintain its peg through what Sun claims is a superior algorithm to Terraform Labs\' that led to the de-pegging. This has raised eyebrows, especially given the parallels to Terra\'s failed UST stablecoin.
Upbit\'s Warning: Caution Advised for USDD Investors
According to a blog post published by a top South Korean cryptocurrency exchange Upbit, investors of the trading platform were warned to exercise caution and be mindful of the risks associated with algorithmic stablecoins like USDD. South Korea’s largest domestic crypto exchange has sounded the alarm over the de-pegging of Tron’s USDD and Waves’ Neutrino USDN stablecoins. Upbit exchange said: “At the moment..." This warning underscores the growing unease within the South Korean crypto community regarding USDD\'s stability.
Justin Sun\'s Response: Over-Collateralization and Transparency
TRON founder Justin Sun has announced plans to implement an “over-collateralized” model for the USDD algorithmic stablecoin. This model is intended to protect After the Terra collapse, USDD will now be overcollateralized, said TRON founder Justin Sun. A reserve which consists of cryptocurrencies and other stablecoins has been increased and will allegedly back USDD. This move aims to reassure investors and distance USDD from the vulnerabilities that plagued UST. Justin Sun said people should “stop” asking him questions like where the yield will come from when the next iteration of his algorithmic stablecoin, USDD. Despite these efforts, skepticism remains.
Will South Korea Take Action Against USDD?
The establishment of a new Digital Asset Committee in South Korea, as reported by NewsPim, signals a proactive approach to crypto regulation. According to the local news portal NewsPim, the country’s ruling party said Tuesday that it would organize a new Digital Asset Committee in early June, amid reports that Terraform Labs co. It remains to be seen whether this committee will directly target USDD. However, given the increased regulatory scrutiny and the shadow of the Terra collapse, it\'s plausible that South Korea could take measures to protect its investors from potential risks associated with USDD. The fate of USDD in South Korea hangs in the balance, dependent on its ability to maintain its peg and prove its resilience in the face of market volatility and regulatory pressure.