TrueUSD is a stablecoin that runs on Ethereum. It is fully collateralized, legally protected and redeemable 1-for-1 in US Dollars. It is useful for traders who want to hold their funds in a crypto wallet without being affected by market volatility.
Why Was TrueUSD (TUSD) created?
TrueUSD was designed to address the issue of volatility in the crypto market. Its value is pegged to the stable currency of the US dollar, meaning it maintains a value of $1 regardless of market conditions. This is in contrast to cryptocurrencies like Ethereum and Bitcoin which are highly volatile and unreliable for payments and storage of value.
What is TrueUSD (TUSD)?
TrueUSD (TUSD) is a fiat-collateralized stablecoin with US Dollars held in escrow accounts by trusted financial institutions. A stablecoin is a type of cryptocurrency designed to maintain a stable price over time. It is pegged to the value of fiat currencies like dollars or pounds.
Stablecoins like TUSD are backed by the specific assets that they are pegged to. An organisation that issues out stablecoins usually sets up a reserve at a financial institution that holds the underlying asset, or fiat currency, that it is pegged to. For example, a stablecoin could issue 100 million coins with a fixed value of $1 and, therefore, have a reserve of $100 million.
Usecases of TrueUSD (TUSD)
Similarly to other stablecoins such as BUSD or USDC, the TUSD stablecoin is used in trading to minimize price volatility on crypto exchanges. It allows traders and crypto investors to hold their money on an exchange without its value fluctuating.
Exchanges: TUSD is used to move money between cryptocurrency exchanges to assist with arbitrage.
Payroll: The use of TUSD stablecoin for payrolls could be extremely effective in times when remote work beyond borders is increasing. It will cost less time and money to process payrolls for businesses and employees won’t have to worry about experiencing problems with their banks.
Safe Haven Asset: Other cryptocurrencies, such as Bitcoin, are not stable stores of value as their prices are highly volatile. This can be highly unsettling for people who need to access their crypto assets regularly. As a safe haven asset, users don’t have to worry about their money fluctuating.
Lending: Due to its high yield, TUSD is a great way for debt investors to collateralize their investments. This makes investing much more appealing.
Escrow: The process of escrow can be entirely automated using a stablecoin such as TUSD. Without the intermediation of institutions, USDD is able to automatically handle the process using smart contract technology.
Payment: TUSD can be used to complete everyday transactions. We can expect to see the use of stablecoins implemented in stores where payments are used by scanning a QR code. Businesses can benefit from this as they are able to avoid the high processing fees of traditional institutions.
Alternative to banking: Not everyone around the world has access to a bank account. With cryptocurrency, all users need is access to the internet to create their own account that they can then store TUSD in. This will help unbanked people participate in the economy.
History of TrueUSD (TUSD)
TUSD was founded by Trustoken on March 5, 2018. After launching TrueUSD, Trustoken formed a partnership with Armanino to enable real-time monitoring of the underlying USD reserves. TUSD was initially launched on the Ethereum network but in August 2019, it launched on the Binance chain. A year later, in 2020, TUSD reached a market cap of $500 million. The stablecoin was launched on the Avalanche chain in 2021, leading to over 400,000 wallets holding TUSD by December of the same year.
Pros and Cons of TrueUSD (TUSD)
Faster transaction speed: Transacting funds through banks can be tedious due to the lengthy processing times. This is especially true when transacting across borders. TUSD cuts down majorly on these times, with transactions processing in as little as 5 minutes.
High-interest rate: TUSD’s high-interest rate is the biggest pro of the stablecoin, however, it is also a con.
Borderless: The ability to be an anonymous and borderless store of value makes an algorithmic stablecoin a necessity for the real world in places experiencing extreme inflation with their fiat currency or sanctions such as Venezuela as they cannot use their own currency to emigrate or transact across borders.
Stable value: People from countries whose currency is prone to extreme fluctuations benefit by holding their funds in a store of stable value.
Transparent: Transparency means that transactions can be viewed by anyone on the internet. This is useful as it dispels any confusion as to where funds are going.
Lower fees: The price to transfer funds across borders tends to be highly expensive. Because TUSD mitigates middlemen, it is able to offer low-fee transactions.
Security: Trading platforms and crypto wallets are highly exposed to hacker threats. Although there are safety measures that can be taken to convolute the threats, the risk is still big because unlike traditional banking, crypto transactions cannot be reversed.
Counterparty risk: As a result of being “decentralized”, multiple parties are involved in the management of a stablecoin. For the coin to maintain its value, all the parties involved need to be properly performing their tasks (security, reserving properly, etc).
Reserve risk: Without reserves being secure, the coin issuer cannot guarantee the value of a stablecoin with full confidence. Reserves are vital as they are the final backer of a stablecoin’s value.
Lack of confidence: The price of a stablecoin can fall if traders lose confidence in its ability to maintain the peg. This usually happens when a stablecoin is not sufficiently backed by hard assets or cash, as it could suffer a run and lose its peg against its target currency.
List of Popular Stablecoins
Binance GBP Stable Coin (BGBP)
Stasis Euro (EURS)
Turkish Lira (TRY)-pegged
Korean Won (KRW)-pegged
Binance KRW (BKRW)
Tether Gold (XAUt)
Paxos Gold (PAXG)
CACHE Gold (CACHE)
Petro (PTR) (oil-backed)
Where To Buy TrueUSD (TUSD)
You can trade TrueUSD on major crypto exchange platforms. You are able to buy, sell or use the TUSD stablecoin for trading on both centralized and decentralized exchanges.
Before buying cryptocurrency, it is important for users to know the risks involved. Because centralized exchanges hold your private keys, you are at risk of losing access to your assets if there is a hack. Holding your cryptocurrency in your own hardware crypto wallet is recommended, but you put yourself at risk of losing your assets forever if you lose your private key or are targeted by hackers unknowingly. In any case, it’s important to do your research before investing in any crypto project; this article is for guidance only and should not be seen as investment advice.