TerraUSD ‘stablecoin’ delisted from crypto exchanges

theguardian.com:

TerraUSD, the “algorithmic stablecoin” whose collapse prompted a multibillion-dollar selloff across crypto markets, has turned off its blockchain and been delisted from major exchanges, in effect shuttering the project for good.

However, the wider impact of the project’s failure appears to have been constrained. TerraUSD was once valued at more than $40bn (£33bn).

Shockwaves swept through cryptocurrency markets on Thursday as tether, the largest stablecoin and a foundational part of the digital asset ecosystem, broke its peg to the dollar. On Friday, however, tether was back to within a fraction of a per cent of its $1 peg and has successfully processed more than $3bn worth of withdrawals without issue.

Bitcoin and ethereum, the two most important cryptocurrencies, have recovered from their lows of early Thursday. Bitcoin is trading at above $30,000 a coin, up from $27,000, while Ethereum is at $2,000, up from $1,700. Both remain far below where they were trading at the start of the week.

Terra’s failure is likely to topple more dominoes, warned Fitch Ratings. “The failure of Terra’s peg has sent shocks through the decentralised finance sector, with a key saving and lending protocol, Anchor, seeing massive liquidation of UST-collateralised loans and the pricing of other crypto tokens also being affected,” the company said.

“This has led to further liquidation triggers throughout the ecosystem … Bouts of volatility will probably continue as the crypto sector digests the repercussions of the failure of the UST peg.”

Stablecoins are intended to maintain a fixed value, typically $1 a coin. But some, such as Terra, are “algorithmic” stablecoins, which maintain that price through a promise to print or destroy currency to match