Due to the fact that TrueUSD is a stablecoin, its price never stays at $1 for very long. It recorded its highest spike to date of $1.30 on May 16, 2018. There is no overall supply.
The question of whether Tether Limited has enough dollar reserves to support its $2 billion+ supply cap was one of the greatest issues surrounding USDT. Although it obviously has a smaller market size at $157 million, TrustToken has this liquidity.
Cohen & Company, an independent auditing company, certifies that TrustToken’s escrow reserves are sufficient to cover its account balances. These audits were once conducted weekly but are now only done twice a month (every other week). To spread the risk, the funds are kept in two different banks, but it should be emphasised that the FDIC cannot protect balances that high.
Several prestigious investment funds, including a16z crypto, BlockTower Capital, Danhua Capital, Founders Fund Angel, GGV Capital, Jump Capital, and others, are supporting TrustToken.
These investors contributed ETH worth $21.7 million during July and August 2018 during the ICO presale.
Several cryptocurrency exchanges, including Binance, DigiFinex, Kryptono, CPDAX, Bit-Z, Cashierest, and CoinTiger, support trading of TUSD. The daily trading volume of TUSD is about $16 million.
TUSD is supported by all ERC20-compatible Ethereum wallets, including MyEtherWallet and Nano hardware wallets, as it is an ERC-20 utility token.
The roadmap for TrustToken also outlines methods for producing tokens for other fiat currencies, such as the Euro and Yuan. TrueEUR (TEUR) and TrueCNY (TCNY), respectively, would be the names of these. As a platform for collateral-backed stablecoins, TrustToken theoretically has the ability to collateralize anything.
In reality, it launched TrustToken stablecoins for the Australian dollar (TrueAUD), Euro (TrueEUR), Canadian dollar (TrueCAD), and Hong Kong dollar before the end of April 2019. (TrueHKD).
What is TrustToken?
The TrustToken Platform is a decentralised application (dApp) built on Ethereum that enables global value transfer and asset-backed token creation. The ERC-20 token and stablecoin known as TrueUSD (TUSD) is linked to the price of the US dollar. Everything about TrustToken’s marketing is obviously designed to capitalise on the claims and debate surrounding Tether USDT’s associations with the cryptocurrency exchange Bitfinex and Bitcoin price manipulation.
Tether’s armour started to show signs of wear in 2017. By the end of 2017, the market cap of USDT reached around $3 billion thanks to the addition of more USDT to the supply. On Bitfinex, an exchange with connections to Tether’s management and development teams, this USDT was used to buy BTC. Tether’s reputation was tarnished throughout the entirety of 2018, which undermined investor confidence.
However, stablecoins continue to be appealing, which is where TrustToken comes into play. SmartTrust smart contracts save complete audit trails for each TUSD using a TrustProtocol. Danny An, Rafael Cosman, Stephen Kade, and Tory Reiss, the co-founders, sincerely want you to know that you can trust them. Do you feel the same way?
Let’s take a closer look at the TUSD cryptocurrency token and how it performs on the cryptocurrency market before we hunt for answers to that question.
Building Trust in Cryptocurrency
Some people believed that cryptocurrencies would be a disruptive replacement for conventional currency when Bitcoin initially appeared at the start of the Occupy Wall Street movement. With confidence in banks and the Federal Reserve at an all-time low, many people were eager to invest in cryptocurrencies, whether fully or just partially.
It was more difficult to extract money from cryptocurrencies, though. Finding merchants who would take it as payment was also difficult. Due to volatile pricing, there could be losses of 10% or more when reconciling payments at the end of the day.
Stablecoins were designed to provide as a safe harbour, ensuring that anyone desiring to accept cryptocurrency payments or withdraw the value of their cryptocurrency accounts may do so at any time.
At first, it appeared to be an easy victory. The first stablecoin, Tether, had hazy ties to the bitcoin exchange Bitfinex. Then it was disclosed that this relationship allegedly played a role in the rise in the price of cryptocurrencies in late 2017. Tether, stablecoins, and the cryptocurrency market as a whole all benefited as a result.blake eye
Stablecoins from Circle, the Winklevoss twins, Paxos, and other companies have since been made available. One of the newest coins in this stable, TrustToken, spreads the risk associated with Tether by keeping the funds in escrow. This means that even if the project were to be terminated, users would still have access to the funds even though TrustToken doesn’t have direct access to them.
Additionally, TrustToken has been actively filing registration forms with federal authorities. It is a money service provider authorised by the Treasury Department of the United States. Therefore, it has Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) standards for users of accounts and transactions.
Let’s talk about how TrustToken functions in relation to conventional banking practises and laws since it behaves similarly in this regard to a bank.
Regulatory Requirements of Stablecoins vs Banks
Much is made of the requirement that stablecoins have sufficient cash reserves to support all transactions in the event of a bank run. In contrast, since fractional reserve banking is used in the United States, banks are not held to this standard.
There is no minimum reserve requirement for American banks with transaction accounts totaling less than $15,2 million. For banks with accounts totaling between $15.2 million and $110.2 million, three percent must be retained in reserves, and for banks with accounts beyond $110.2 million, ten percent must be held in reserves.
As a result, TrueUSD’s market cap puts it in the upper range, where just 10% of a currency should be backed by the US dollar.
Of course, cryptocurrencies like TrustToken aren’t subject to the same regulations as fiat money. Unless otherwise stated, they are currently taxed and governed like commodities.
Due to the negative publicity surrounding Tether, TrustToken goes above and beyond to make sure it abides by the law.
TUSD is not intended to be the only cryptocurrency token issued by TrustToken. The ultimate objective is to include all forms of assets, including money, precious metals, diamonds, real estate, and more.
Additionally, it is actively developing; in March 2019, real-time reserves verification was included. One of the four stablecoins (together with USDC, PAX, and DAI) that collectively support the Neutral Dollar is TrueUSD. The project stands out for not including Gemini (GUSD) and Tether (USDT) in its computations.
As cryptocurrency continues to reach for mainstream acceptance, stablecoins like TrustToken have the spotlight. The TrustToken platform hopes to differentiate itself from the pack and build a decentralized trust system for assets of all types. Its success hinges on these key ingredients.
- TrustToken is backed by over a dozen accredited institutional investors. It has the money to back its entire TUSD supply, which is attested to through regular independent audits.
- Dollars are held in escrow distributed across multiple trusted banks (two so far). TrustToken doesn’t have access to the money as a safeguard against Tether-like price manipulation.
- TUSD is the first asset-backed stablecoin on the TrustToken platform. More fiat currencies and other assets are planned for onboarding in the future.
If TrustToken can maintain consumer and enterprise trust, it has the right roadmap to disrupt cryptocurrency. That’s easier said than done, and TUSD’s fate may inevitably be tied to USDT.