The TrueUSD (TUSD) is one of a growing number of stablecoins that peg their value to the U.S. dollar. It was created and issued by TrustToken and the peg and reserves are also maintained by TrustToken. The key unique feature of TUSD is that it is the first stablecoin which was released with the primary focus being transparency.
Those interested in the TUSD can register and purchase it at the rate of 1:1 against the U.S. dollar on the TrustToken platform. The TUSD was quickly adopted thanks to its transparency and it is listed on many of the major cryptocurrency exchanges. It is currently the thirty-seventh largest cryptocurrency by market cap, which does put it behind several other stablecoins, however, it is also a major component of the evolving blockchain ecosystem.
The growth and prominence of the TUSD have helped to improve the perception and reputation of stablecoins among the general population, as well as among investors and regulators. This is due to it being fully transparent and the first regulated stablecoin fully backed by the U.S. dollar.
TUSD Stablecoin
TrueUSD (TUSD) is the ticker symbol and short-form name of the True U.S. dollar. It is the first tokenized asset created on the TrustToken platform, and is the first fully regulated, transparent stablecoin released. The TUSD represents tokenized U.S. dollars at a rate of 1:1. The TUSD is an ERC-20 token that was created on the Ethereum blockchain, which is where it derives its security from.
Those using the TUSD benefit from the ability to immediately enter and exit cryptocurrency markets without needing to worry about time constraints created by settlement processes in the traditional banking ecosystem.
Because TUSD is an ERC-20 token it takes advantage of the ever-expanding and evolving Ethereum blockchain ecosystem. This gives the benefit of open-source smart contracts, which power the USD transactions 24/7/365.
TUSD tokens are created and destroyed as users purchase and redeem them. Each USD taken in as TUSD is created is put in escrow, meaning the full issued and circulating supply of TUSD is completely collateralized and backed by U.S. dollars.
How Does TUSD Work?
The TrueUSD (TUSD) works through the use of Ethereum smart contracts on the Ethereum blockchain. Through these smart contracts, it is able to issue and redeem a tokenized version of the U.S. dollar. Whenever a user purchases TUSD through the TrustToken platform with U.S. dollars the smart contract that underlies the platform automatically creates and issues the corresponding equivalent amount of TUSD, which then becomes a part of the circulating supply of the token.
Conversely, whenever a user redeems TUSD through the TrustToken platform a smart contract automatically takes the tokens being redeemed and burns them, or removes them permanently from the circulating supply of TUSD. At the same time, the platform credits the user with an amount of U.S. dollars equal to the amount of TUSD redeemed.
One of the benefits of using the TUSD is that TrustToken charges no purchase or redemption fees for transactions. The company generates its revenues through the collection of interest on the U.S. dollars being held in the company accounts.
Is TrueUSD (TUSD) Safe?
TrueUSD (TUSD) is widely considered to be one of the safest stablecoins currently available on the markets. This is partially due to the transparency of TrustToken and the fully-backed nature of the cryptocurrency. There are other reasons to consider TUSD to be a safe holding:
- Security – The smart contracts used by TrustToken have been independently audited three times, by three different security firms, and no issues were found or reported by any of them.
- Escrow – Not only are all the funds backing TUSD held in escrow, but they are also held by third-party trust companies so that TrustToken has no direct access to the user funds being held in reserve.
- Asset Insurance – Holders of TUSD are legally protected from misappropriation of funds by the laws of the United States and the accounts where funds are held are FDIC insured accounts.
- Audits – TrustToken is audited monthly by the accounting firm Cohen & Company and attestations are posted. This ensures that TUSD remains fully collateralized with escrowed funds that match its issued supply.
- Licensed and Regulated – TrustToken is fully licensed to operate in the U.S., and the TUSD is the first regulated stablecoin to be issued in the U.S.
Benefits of Using TUSD
There are a number of reasons for individuals and institutions to use TrueUSD (TUSD). One is that it allows traders and investors to enter the cryptocurrency markets without being instantly exposed to volatility. It also allows the same investors and traders to exit the markets and avoid rising volatility by seeking the stability of the TUSD.
Among stablecoins TUSD remains transparent, with monthly audits confirming the amount of U.S. dollars held in escrow in FDIC insured U.S. bank accounts matches the amount of TUSD in circulation.
As the number of trading pairs and liquidity grows the TUSD will become increasingly useful. Finally, there is a limited third-party risk since TUSD can be easily redeemed, or stored in any ERC-20 compatible personal wallet.
TrueUSD (TUSD) Wallets
Because TrueUSD (TUSD) is an ERC-20 token users may store the token in any wallet that is compatible with ERC-20 tokens. That gives users a large selection of wallets, from mobile wallets to web-based wallets, to desktop wallets, or for the strongest security, a hardware wallet like the Ledger or Trezor can be used.
For anyone holding more than a few hundred dollars of TUSD, we recommend using a hardware wallet for the best security. This is because all of your private keys are kept on the device and all transaction signing is done in on the device.
Bottom Line
TrueUSD (TUSD) has been gaining popularity as a transparent and useful stablecoin and is certainly a contender for becoming the top stablecoin. Its focus on compliance and transparency have made it a solid competitor for Tether, which has a long history of questionable practices. In time TUSD might even become an alternative to USDT.
By putting TUSD on the Ethereum blockchain the TrustToken team is using the proven security, wallet infrastructure, and smart contracts that TUSD needs to grow and thrive. It really was a wise decision that has helped TUSD get off to a faster start than might have been possible otherwise.
