Starting May 18, TrueUSD (ticker: TUSD) will be listed on Binance, permitting traders to sell it for Ethereum, Bitcoin, or Binance Coin.
Launched in Mar by San Francisco-based startup TrustToken, TrueUSD is a supposed stablecoin — a cryptocurrency whose value is pegged to the value of a normal asset, in this box the U.S. dollar. TrustToken claims that TrueUSD is entirely collateralized with fiat money, hold in escrow accounts permitted by devoted third-party fiduciary partners. The association says it publishes monthly reports on the state of the bank comment holdings, and subjects them to ongoing audits.
“Having U.S. dollars as collateralization hold in escrow in further to our unchanging accounting reports provides traders with soundness that they can trust in TrueUSD,” Rafael Cosman, co-founder and CTO of TrustToken, pronounced in a statement.
In other words, every singular TUSD should always be redeemable for U.S. dollars, at a 1:1 ratio, with a pretty good grade of certainty that the issuer indeed has the dollars to back them up.
While the thought of a cryptocurrency formed on an tangible banking sounds mocking — the whole point of crypto was to rise an choice to real-world, centralized financial systems — the growth is critical for the space. Stablecoins yield traders and investors with a certain grade of fortitude in the flighty universe of cryptocurrencies, but the need to sell cryptocoins for straight-up cash, an movement that mostly has taxation consequences.
“Having U.S. dollars as collateralization hold in escrow in further to our unchanging accounting reports provides traders with soundness that they can trust in TrueUSD.”
So far, the widespread stablecoin has been Tether (ticker: USDT), which is connected to cryptocurrency sell Bitfinex. If you ask Tether, the company, USDT is entirely corroborated by fiat banking resources in the company’s haven account. But there’s a problem with that claim: There are $2.2 billion USDTs in dissemination (according to CoinMarketCap), and the association has never been publicly audited. This, in turn, has led to conjecture that USDT is not sufficient collateralized, and that Tether is copy new USDTs out of nothing.
The idea that Tether might fall and means a big intrusion in the cryptocurrency marketplace is famous in the space as “Tether FUD” (with FUD station for “Fear, Uncertainty, Doubt).
Now, however, traders on Binance — which is now the second-largest cryptocurrency sell (behind OKEx), with $1.8 billion in trade volume in the last 24 hours — have a choice to park their resources into TUSD instead of USDT. This should palliate the fear of a probable Tether fall as well as give traders the choice to sidestep their bets and variegate opposite two USD-pegged coins.
TrueUSD is already available on cryptocurrency sell Bittrex, where it launched in March. But Binance is approximately 7 times bigger than Bittrex in terms of trade volume, and it’s the second largest Tether market, creation this new partnership distant more important.
There are now roughly 12 million of TUSDs circulating, representing an equal volume of collateralized dollars. The direct on Binance will expected be distant bigger than that, but Cosman says this won’t be a problem.
“Right now, there are countless outmost parties depositing additional supports into the TrueUSD escrow comment to squeeze tokens and trade them on the exchanges. The marketplace top of TrueUSD can grow by millions or tens of millions per day; as shortly as the US dollars arrive in the escrow comment to collateralize new tokens, we packet those tokens and emanate them,” he told Mashable.
TrueUSD and Tether aren’t the only stablecoins around, but they’re the biggest ones that took the elementary but capital-intensive track of subsidy the whole token supply with tangible fiat reserves. Alternatives such as MakerDAO’s Dai or Havven’s nomin rest on pot in cryptocurrencies such as sky as well as formidable algorithms that keep the cost in place. These alternatives are distant more decentralized than a resolution such as TrueUSD, but they aren’t available on the largest exchanges yet.
There are, however, some absolute competitors on the horizon; just days ago, Circle lifted $110 million to launch a stablecoin pegged to the value of U.S. dollar.
Disclosure: The author of this content owns, or has recently owned, a number of cryptocurrencies, including BTC, ETH, MKR, DAI, HAV. The author of this content does not own, or has recently owned, TUSD or USDT.