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Main Street msUSD Stablecoin Loses Dollar Peg and Drops 90%

After the verification was cut off, msUSD lost its dollar peg within hours. The impact went beyond the stablecoin itself, with heavy pressure on the linked yield token.

By Luc Vesters
• 2 min read
Main Street msUSD Stablecoin Loses Dollar Peg and Drops 90%

Key Takeaways

  • Main Street USD (msUSD) lost its dollar peg on Saturday after Accountable ended its partnership with the protocol.
  • The price fell about 90 percent within hours to around $0.29, while market value dropped to about $30.5 million.
  • The event shows how vulnerable stablecoins can be when they depend on one outside verification provider for transparency and trust.

The stablecoin Main Street USD (msUSD) suddenly lost its peg to the U.S. dollar last Saturday after verification firm Accountable ended its partnership with the protocol. That triggered a price drop of about 90 percent within hours, with msUSD now trading around $0.29, while its market value has fallen to about $30.5 million.

Accountable Ends Verification Agreement

Accountable provided real-time proof-of-reserves checks, which let companies verify their assets without revealing sensitive information. The company, which has been active since 2024 and serves clients including Galaxy and Amber Group, ended the partnership with Main Street because it did not meet its own verification standards. That caused the feed tracking msUSD's underlying reserves to go offline, which immediately hurt confidence in the stablecoin.

Risks of Relying on Outside Verification

Main Street positioned msUSD as a stablecoin that would always be redeemable 1-for-1 for USDC, backed by crypto-collateral reserves. Users could also stake msUSD to receive msY, a yield token that generates returns through delta-neutral options strategies. This setup depended heavily on Accountable's verification function and integrations with major platforms like Morpho, a leading decentralized lender.

The sudden end of verification highlights how vulnerable stablecoins can be when they rely on one outside party for transparency and assurance. This incident follows earlier depegging cases this year, where stablecoins lost their peg because of doubts about their underlying reserves. The value of msY also dropped sharply at the same time, leading to extreme illiquidity and high borrowing rates on the Morpho market. That fits into a broader debate about the role of stablecoins in DeFi yield strategies, where liquidity can shift fast once confidence disappears.

Why This Matters for European Crypto Users

This event highlights the importance of transparency and strong verification methods for stablecoins, including for European users and investors. Stablecoins that depend on outside verification can suddenly lose value if that verification goes away. That can affect the stability of crypto positions and the reliability of yield strategies that are used or offered in Europe.

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