Stablecoins were invented with the intent of creating cryptocurrencies that didn’t suffer the primary drawback of the industry: volatility, and the second most: legitimacy. This gave rise to many different types of stablecoins such as TrueUSD, a cryptocurrency that is fully backed dollar for dollar by USD. After going through a verification process, users can purchase and redeem TrueUSD for USD, sent directly to their bank account, without any third party interaction. In order to ensure their reputation, TrueUSD undergoes regular audits on their trust accounts holding the USD to verify balances.
By: Jack Spade | May 8, 2020 | Modified May 8, 2020
TrueUSD can be purchased from TrustToken on their website, if you wish to redeem for USD and fully utilize the stablecoin. This requires full KYC/AML verification in order to connect a bank account and purchase or redeem TrueUSD.
TrueUSD was launched in January of 2018, following the cryptocurrency crash in 2017/2018. TrueUSD met the increased need for a transferable alternative to regular cryptocurrencies. It was also a time when there was hot contention brewing about the leading USD backed stablecoin, Tether (USDT), and it’s mysterious and un-audited USD reserve, along with its unclear and nontransparent partnership with Bitfinex.
In the midst of the lack of clarity, exchanges were looking for better alternatives to Tether. TrustToken, parent of TrueUSD, capitalized on this opportunity and launched its stablecoin in 2018. Soon after, TrustToken created multiple stablecoins for different currencies such as TrueGBP, TrueEUR, TrueCAD, TrueHKD, and TrueAUD.
Trusted Backing: TrueUSD is backed dollar for dollar by USD, and is held in partner banks that handle the user funds directly.The company behind TrueUSD, TrustToken, not involved in this process at all. This means that when users are purchasing TrueUSD, they are trusting deposit institutions, such as PrimeTrust, that hold the funds backing TrueUSD, who have banking relationships with the Bank of America.
PrimeTrust acts as an escrow account. This enables coin holders to audit the holdings regularly, and know that TrustToken has zero access or control over the funds. This also builds true among users, knowing that USD holdings as solely the property of the TrueUSD token holders.
Regular Audits: TrueUSD has had its code audited, and goes through regular monthly audits of its escrow accounts by entities such as Cohen & Company. This reinforces user trust by ensuring that every circulating TrueUSD is redeemable for USD whenever the user wishes.
Built on Ethereum: This is an advantage because it enables holding TrueUSD in Ethereum wallets. This allows for easy transfers, as well as being held alongside many other Ethereum tokens. It also ensures that the token is built using a reliable standard, ERC-20.
More than one stablecoin: As stated earlier, TrueUSD is built by TrustToken, who also has multiple other stablecoins such as TrueGBP, TrueEUR, TrueCAD, TrueAUD, and TrueHKD. This allows users to set up their TrueCoin account on TrustToken’s website, and then have access to purchasing all these various stablecoins, pegged to their respective FIAT currencies.
Pegged to USD: As much as this is the sole reason for this cryptocurrency to be called a ‘stablecoin’, TrueUSD’s buying power isn’t shielded by economic conditions of its respective FIAT currency. In times such as 2020, when US markets are in turmoil, the buying power of TrueUSD will also fluctuate in tandem with the US dollar, making it liable to economic conditions in the US.
Built on Ethereum: This serves to be a disadvantage, as much as it is advantageous. Being built on Ethereum opens up counterparty risk, meaning TrueUSD is vulnerable to anything that Ethereum would be vulnerable to.
Yes, TrueUSD is truly stable. You could see fluctuations of up to a couple cents at a time, but never more than that. You will also always see TrueUSD hover around its $1 value.
TrueUSD provides stability and legitimacy to cryptocurrency. It brings merchants, vendors, and businesses the advantages of using a cryptocurrency over FIAT currency for payments, i.e, simple and fast cross border transactions, low fees, and short settling times. It also provides companies, organizations, and individuals alike the assurance that when making a cryptocurrency transaction, the value of their transaction amount will remain the same.
You can definitely cash TrueUSD for US dollars. Allowing a simple and streamlined redemption process once you have gone through the verification process on their TrustToken platform, makes TrueUSD one of the best stablecoins out there. A trusted party settles the exchange between TrueUSD and USD, to ensure that TrustToken cannot censor or disallow any such exchanges.
Yes and no, it depends on your method of measurement. Legitimacy? Yes. Redeemability? Yes. Actually being backed by USD? Yes. Based on ubiquity, market share, and liquidity of the market across exchanges, no. Tether would still take the cake on that being valued at 6.3b USD. Bear in mind Tether’s lawyer recently stated that each Tether was only backed with $0.74 USD.
No. So long as banks keep running and the Ethereum network is still active, TrueUSD will be fully operational. The advantage here is that TrueUSD relies on the continued operation of banks and the Ethereum network.
Yes, TrueUSD is legit. You can find their auditor reports online, and they have recently partnered with auditing firm Armanino which will allow users to conduct real-time audits and tracking of the USD backing their TrueUSD.
Yes, absolutely. Head over to Binance, Bittrex, Okex, Huobi, or any of the 70+ exchanges listing TrueUSD and you can buy Bitcoin with TrueUSD, as well as many other pairs.