While crypto dates back to the time of Satoshi Nakatomi in 2009, with the launch of the first cryptocurrency Bitcoin, stablecoins have been a relatively newer phenomenon. In 2014 we witnessed the founding of BitUSD, the first ever stablecoin that shook the market. Over the last few years, stablecoins have been growing massively in popularity and their adoption has increased significantly. The crypto industry has a huge volume in trade, amounting to around 35 billion dollars.
Of this stablecoins now hold a substantial position with 31.12 billion dollars in training volume.
Coins like USDT and BUSD have faired pretty well recently, which has led to the rise of many more stable coins. In such a scenario many are wondering whether TUSD is a good investment or not. In this article, we discuss about the pros and cons of TUSD and tell you whether it is smart to hold the coin now.
What is TUSD?
TUSD stands for TrueUSD, a stablecoin whose value is attached to the US dollar. This value pegging is in the ratio of 1:1 and is created on the TrustToken network. Some of the main features of the coins as follows
- It is completely collateralised in nature
- It is a legalised coin that was launched in 2018
- Its holdings are allocated over multiple bank accounts that are owned by various trust firms.
- All entities that are a part of this are bound to comply with the audits that occur monthly
- They need to publish their collateralized holdings as a prerequisite
- Multiple escrow accounts are employed by TUSD which reduces risk and safeguards users from thefts
Who are the Banking Partners of TrueUSD?
Armanino which is one of the biggest accounting firms in the United States of America has been credited to attesting TrueUSD live. This ensures that the value remains at a 1:1 ratio with USD and the collateral rate is at a 100 per cent. Apart from this, TrueUSD is currently in partnership with five banking firms namely Signature Bank, Silvergate Bank, Prime Trust, First Digital Trust, and BitGo.
- Signature Bank is an FDIC-insured banking firm that is in fact the first of its kind that established a blockchain-centred virtual payments protocol. They partnered with TrueUSD in June 2021 and have allowed users to mint round the clock at a great speed.
- Silvergate Bank started its accounts aimed at crypto trades in 2014. TUSD uses Silvergate’s services to enable the boosting of their minting services.
- Prime Trust is a trust firm that has many connections in the market. Its partnership with TUSD helps the stablecoin to offer users with an impressive instant settlement.
- First Digital Trust which was launched in 2017, has collaborated with TrueUSD to provide for users who are dealing with a smaller amount of the stablecoin.
- BitGo is a very well known asset custodian which provides TUSD with an added layer of security. It facilitates custody benefits and gives multi signature wallet support
Pros and Cons of TUSD
Every stablecoin has its own set of advantages and disadvantages that we must consider as an informed user
Pros of TUSD
- TUSD has received complete licensing and regulation in the United States of America
- You can easily trade the stablecoin on a lot of reputable exchanges including Binance
- Offers impressive liquidity
- Receives the same level of security as other ERC 20 tokens via the Ethereum network
Cons of TUSD
- You are required to fulfil the KYC (Know Your Customer) and AML (Anti Money Laundering) verification process with personal documentation
- Token is centralised
- Your account can be frozen or even funds can be confiscated if the platform suspects anything unusual.
Also Read Other Stablecoin posts:
- USDC Depegging: Can USDC Go to zero like UST?
- SEC Halts Issuance of Binance’s BUSD Stablecoin, Plans Enforcement Against Paxos
Should you hold TUSD?
TUSD is bound to grow its collaboration in the future. Its partnerships so far have reflected a great level of reputability, with maybe one exception. Even if Silvergate goes down, we believe that TUSD won’t have a huge impact since it has four other major partners. Binance has been supporting TUSD a lot lately.
TrueUSD’s stablecoin circulating supply recently crossed around 1.1 billion dollars and has also beaten Frax Finance’s native stablecoin frax (FRX) in the list of market values. According to CoinDesk’s interaction with cryptoQuant, “TUSD exchange reserves experienced a 39% gain between Feb. 13 and Feb. 22, driven mostly by Binance”. With all the evidence we have currently, TUSD seems like a safe and secure coin to hold.