apxUSD stablecoin briefly loses $1 peg, falls to $0.93

A stablecoin backed by corporate preferred shares briefly lost its peg to the U.S. dollar this week, highlighting the risks of a novel model for creating digital dollars. The token, apxUSD issued by the Apyx protocol, fell to approximately $0.93 on June 4 during a broader cryptocurrency market decline.

The depegging event occurred as Bitcoin’s price dropped toward $63,000, putting pressure on the value of the token’s primary collateral. Unlike traditional stablecoins such as USDC, which are backed by cash and cash equivalents, apxUSD is a synthetic dollar primarily collateralized by preferred shares issued by digital asset treasury companies. The core asset is the Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) issued by the company Strategy.

The stability of apxUSD is therefore directly tied to the market price of STRC, which is structured around a $100 stated value per share. When STRC traded below this par value during the market downturn, the value of the reserves backing apxUSD declined, leading to downward pressure on the stablecoin’s price in secondary markets.

In response to the event, Apyx stated that the price movement reflects the expected mechanics of...