The Falcon USD stablecoin (USDf) from Falcon Finance lost its peg to the US dollar, dropping to $0.9783 on Tuesday, July 8, 2025. The main reason was liquidity issues and doubts about the quality of the collateral, which, according to the issuer, consists of 116% Bitcoin and other stablecoins. Critics point to the opacity of reserves, possible troubled debts, and poor project management, which undermined investor confidence.
Unlike market leaders like USDT and USDC, Falcon USD uses volatile crypto assets as collateral, which increases risks. After the price drop, the market partially recovered, but confidence remains shaky. This is reminiscent of the TerraUSD crash in 2022, when the loss of the peg led to billion-dollar losses.
The event sparked discussions about the need for stricter regulation of stablecoins, especially in light of the passage of the GENIUS Act in the US, which creates a regulatory framework for such assets.
Investors should closely monitor the situation, as the stability of stablecoins critically depends on transparency and liquidity. Subscribe to #MiningUpdates to stay updated on cryptocurrency market news!
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