Terra USD: Stable coin becomes unstable as crypto markets fall

The recently launched stable coin by Terra is facing instability as the crypto markets fall over 50 percent from their highs.

UST, the stable coin which is expected to maintain a 1:1 with the U.S. Dollar fell to $0.62 before recovering to $0.79 at the reporting time.Luna, UST’s counterpart, has roughly halved in value in the past 24 hours.

Created by Singapore-based Terraform Labs in 2018, UST is what’s known as an “algorithmic” stablecoin. Part of the Terra blockchain project, it’s meant to track the value of the dollar, like fellow stablecoins tether and USDC.

Terra USD has a market cap of $13.53 billion, while LUNA's market cap stood at $5.9 billion. And as per CoinMarketCap there are around 18.5 billion of UST in circulation.

Do Kwon, the crypto upstart behind UST, has previously committed to buying as much as $10 billion worth of Bitcoin as part of the support of the coin but that too is a failed experiment.

Crypto markets have been under heavy selling pressure as the dominant Bitcoin fell more than 55 percent from its highs to trade below $30,000.