In our guide to stablecoins, we have explained how these
In our guide to stablecoins, we have explained how these unique cryptocurrencies are designed to withstand the volatility inherent in crypto markets.
Stablecoins are pegged to fiat currencies to ensure they are comparatively more stable and cushioned safely even in the midst of drastic market changes.
One such stablecoin is TrueUSD. In this beginner’s guide to TrueUSD, we take a look at what it is, and what really sets it apart.
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What is TrueUSD?
TrueUSD is the native token of the TrustToken platform that is meant to develop and launch stablecoins pegged to fiat currencies.
The platform is also capable of working with cryptocurrencies that are backed by tokens representing real world assets.
TrueUSD as the flagship coin of such a platform is naturally backed by a rather strong fiat currency: the US Dollar itself. As per the developers’ claims, each TrueUSD Coin is backed by 1 USD. It is a token based in the Ethereum platform, of the ERC-20 variety.
Given its value must always remain attached to that of the USD, it becomes somewhat immune from the recurrent pressures of the crypto market.
Third party verifications make sure the value of the TrueUSD token is kept at the required level. For this, the blockchain developers make use of several third party escrow accounts, that, despite slightly compromising the decentralized aspect of this cryptocurrency, ensures it lives up to the definition of being a stablecoin.
According to the website of the TrustToken platform, the TrueUSD Token, that has the ticker symbol TUSD is described as:
“The only regulated, exchange-independent stablecoin backed 1-for-1 with US Dollars”
How does TrueUSD Work?
TrueUSD Coin’s stability and ability to aid tokenization of assets is maintained by using third party escrow accounts as a crucial tool.
After an organisation, that is interested in partaking in the platform, has completed its KYC/AML (Know Your Customer and Anti Money Laundering Regulations) obligations, it wires the requisite number of US dollars to a third party escrow service’s account.
In lieu of that, an equivalent number of TUSD coins are mined and transferred, thereby putting it in circulation. In the near future, the TrustToken platform hopes to diversify to more forms of fiat currencies and bring the minimum requirement value down from its current $10000 level.
What Makes TrueUSD Unique?
Although the stablecoin market is not incredibly crowded, it does have some established players like Tether or Maker DAO.
While Maker DAO makes use of an algorithm to control the value of its coin, Tether claims to be asset-backed just like TrueUSD is.
However, although Tether or USDT is indeed the best-known stablecoin in the market, it has had many aspersions cast on its reliability.
As we have mentioned in our guide to Tether, that stablecoin is quite opaque in terms of how it backs its coins with real US Dollars. That is the problem area that TUSD plans to plug, by establishing an area of trust, based on verification by third party escrow accounts.
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Should You Choose TrueUSD?
TrueUSD does come with impressive specs in place, guaranteed backing by the US Dollar being the chief one of them. In addition, it is rather transparent, holding routine audits. Created with the unique aim of facilitating asset tokenization, TUSD is well-positioned to achieve its objective and carve out a niche for itself.
On the other hand, one must also be well aware of its lack of complete decentralization and partial opaqueness as it does not reveal all of its audit results. In terms of legality too, it remains on a slightly shaky footing.
Having said all of that, TUSD is definitely a coin to watch out for. If you wish to buy TUSD for yourself, you can easily do so from top cryptocurrency exchanges such as Binance, Bittrex, Huobi, KuCoin, OKCOIN etc.
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