Curve Finance May Cut TrueUSD as crvUSD Collateral

A proposal on Curve Finance is aiming to eliminate TrueUSD (TUSD) as collateral for its crvUSD stablecoin due to worries about TUSD’s stability and regulatory concerns.

Submitted by a user named “WormholeOracle,” the proposal suggests setting the TUSD collateral limit to zero and reducing the minting capacity of crvUSD linked to PayPal’s PYUSD from $15 million to $5 million.

The rationale behind this move is rooted in TUSD’s recent troubles, including SEC allegations of fraud against its issuer, TrueCoin, for not fully backing the stablecoin with U.S. dollars.

This proposed change seeks to diversify crvUSD’s collateral and lessen dependence on assets viewed as risky.

READ MORE:

Bitcoin Eyes New Heights, Will Altcoins Follow?

This initiative highlights the challenges that decentralized finance protocols face in maintaining regulatory compliance and market stability. If approved, it could reshape TUSD’s role in the DeFi ecosystem and influence how other stablecoin projects manage collateral.

Earlier this year, TUSD saw a notable depegging, dropping to $0.97 amidst significant net outflows on Binance, which further eroded confidence in the stablecoin. Following a hacking incident, TUSD fell even lower to $0.985.

Alexander Zdravkov

Alexander has been working in the crypto industry for three years, during which time he has established himself through his active participation in monitoring market dynamics and technological innovations. His interest in cryptocurrencies and new technologies is not just a professional commitment, but a deep personal passion. He follows the news in the sector daily, analyzes trends, and is excited about every new step in the development of blockchain solutions. His enthusiasm drives him to continuously learn and share knowledge, as he sees the future in digital finance and its role in global transformation.