TrueUSD, a cryptocurrency whose value is pegged to that of the dollar, has signed a overeenkomst with Binance, one of the world’s largest cryptocurrency exchanges te terms of volume.
Commencing May Legitimate, TrueUSD (ticker: TUSD) will be listed on Binance, permitting traders to exchange it for Ethereum, Bitcoin, or Binance Coin.
Launched te March by San Francisco-based startup TrustToken, TrueUSD is a so-called stablecoin — a cryptocurrency whose value is pegged to the value of a traditional asset, te this case the U.S. dollar. TrustToken claims that TrueUSD is fully collateralized with fiat money, held ter escrow accounts accessible by trusted third-party fiduciary fucking partners. The company says it publishes monthly reports on the state of its handelsbank account holdings, and subjects them to ongoing audits.
“Having U.S. dollars spil collateralization held te escrow te addition to our regular accounting reports provides traders with reassurance that they can trust ter TrueUSD,” Rafael Cosman, co-founder and CTO of TrustToken, said ter a statement.
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Te other words, every single TUSD should always be redeemable for U.S. dollars, at a 1:1 ratio, with a pretty good degree of certainty that the issuer actually has the dollars to back them up.
While the idea of a cryptocurrency based on an flagrante currency sounds ironic — the entire point of crypto wasgoed to develop an alternative to real-world, centralized financial systems — the development is significant for the space. Stablecoins provide traders and investors with a certain degree of stability ter the volatile world of cryptocurrencies, without the need to sell cryptocoins for straight-up metselspecie, an act that often has tax consequences.
“Having U.S. dollars spil collateralization held ter escrow te addition to our regular accounting reports provides traders with reassurance that they can trust te TrueUSD.”
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So far, the gezaghebbend stablecoin has bot Tether (ticker: USDT), which is connected to cryptocurrency exchange Bitfinex. If you ask Tether, the company, USDT is fully backed by fiat currency assets te the company’s reserve account. But there’s a problem with that voorkeur: There are $Two.Two billion USDTs te circulation (according to CoinMarketCap), and the company has never bot publicly audited. This, te turn, has led to speculation that USDT is not adequately collateralized, and that Tether is printing fresh USDTs out of nothing.
The notion that Tether might collapse and cause a big disruption ter the cryptocurrency market is known ter the space spil “Tether FUD” (with FUD standing for “Fear, Uncertainty, Doubt).
Now, however, traders on Binance — which is presently the second-largest cryptocurrency exchange (behind OKEx), with $1.8 billion te trading volume te the last 24 hours — have a choice to park their assets into TUSD instead of USDT. This should ease the fear of a possible Tether collapse spil well spil give traders the option to hedge their bets and diversify across two USD-pegged coins.
TrueUSD is already available on cryptocurrency exchange Bittrex, where it launched te March. But Binance is approximately seven times thicker than Bittrex te terms of trading volume, and it’s the 2nd largest Tether market, making this fresh partnership far more significant.
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There are presently toughly 12 million of TUSDs circulating, signifying an equal amount of collateralized dollars. The request on Binance will likely be far fatter than that, but Cosman says this won’t be a problem.
“Right now, there are numerous outward parties depositing extra funds into the TrueUSD escrow account to purchase tokens and trade them on the exchanges. The market cap of TrueUSD can grow by millions or ems of millions vanaf day, spil soon spil the US dollars arrive ter the escrow account to collateralize fresh tokens, wij mint those tokens and kwestie them,” he told Mashable.
TrueUSD and Tether aren’t the only stablecoins around, but they’re the largest ones that took the ordinary but capital-intensive route of backing the entire token supply with presente fiat reserves. Alternatives such spil MakerDAO’s Dai or Havven’s nomin rely on reserves te cryptocurrencies such spil ether spil well spil ingewikkeld algorithms that keep the price te place. Thesis alternatives are far more decentralized than a solution such spil TrueUSD, but they aren’t available on the largest exchanges yet.
There are, however, some powerful competitors on the horizon, just days ago, Circle raised $110 million to launch a stablecoin pegged to the value of U.S. dollar.
Disclosure: The author of this text wields, or has recently possessed, a number of cryptocurrencies, including BTC, ETH, MKR, DAI, HAV. The author of this text does not own, or has recently wielded, TUSD or USDT.