Curve Token Rises Over 10% As Crypto Traders Eye Curve USD Stablecoin

by Arthur · February 13, 2023

The token of stablecoin swapping service Curve (CRV) rose 11% in the past 24 hours amid broader market demand for decentralized stablecoins.

Although Curve does not offer native stablecoins yet, its upcoming Curve USD (crvUSD) token is highly anticipated in crypto circles. Curve’s plans to deploy a dollar-denominated asset first became public in June, as CoinDesk reported.

Curve appeared to tease the upcoming issuance of crvUSD on Monday, saying an ongoing proposal would be “necessary for crvUSD to function autonomously.” The ongoing proposal would allow stablecoin pools to supply price data to external protocols.

Such a development likely acted as a catalyst for traders as demand for CRV increased and the tokens saw over $770 million in trading volume on crypto exchanges.

Curve relies on smart contracts instead of intermediaries to provide financial services such as stablecoin loans, trading and lending to users. Depositors on Curve earn annual returns of up to 4% from one of the many pools on the platform.

CRV traded above $1 on Tuesday, reaching early January levels and bucking an overall market decline as bitcoin (BTC) lost 1%. The move came as tokens related to decentralized stablecoins became the latest driver of crypto markets.

According to a WSJ report on Sunday, the US Securities and Exchange Commission (SEC) claims on Sunday that BUSD is an unregistered security. The news came days after CoinDesk previously reported that Paxos is under investigation by the New York Department of Financial Services, although the scope of the NYDFS’ investigation is unclear.

Decentralized stablecoins rely on a basket of cryptocurrencies to support the link to a fiat currency, mostly the US dollar. They can either be algorithmic – where another token is issued and continuously minted or burned to help maintain the stablecoin’s peg – or overcollateralized – where the curve of assets is far in excess to support a stablecoin’s net circulation.

“CrvUSD could be a very interesting development, as we have yet to see a stablecoin issued by a major DEX,” (decentralized exchange) Daniel Zlotin, senior DeFi developer at Orbs, wrote in a Telegram message to CoinDesk and explained crvUSD’s utility.

“Coupling a stablecoin with a viable one [decentralized finance] the platform could open up some interesting possibilities in terms of new models (such as using LP tokens as part of the support system),” Zlotin added, warning that there would “definitely be some challenges” in implementing such a concept.