What Is TrueUSD? | TUSD Review | Notum
May 25, 20224 min read
What Is TrueUSD?
TrueUSD is a classic representative of fiat-backed stablecoins, along with Tether, USDCoin, and others. The TUSD stablecoin is the brainchild of the TrustToken company, whose activities are aimed at tokenizing fiat currencies, including USD, GBP, AUD, and others. The key difference between TUSD and other fiat-backed stablecoins is that the company uses third-party escrow accounts to lock users’ funds. Thus, if Tether is a USDT issuer company and stores users’ funds on its bank account and therefore has access and power over them, then in the case of TUSD, the situation is radically opposite. TrustToken is a kind of intermediary between users and trusted banks/companies. All the users’ fiat funds used to issue TUSD stablecoins are stored in escrow accounts, and the TrueUSD team does not have access to these accounts and cannot use them at its discretion. To date, there are more than 1.27 billion TUSD in circulation, which means that the same amount of USD is locked in escrow bank accounts.
Who Confirms the Reserves?
In order to ensure transparency and reliability, the project attracted third-party accounting companies that posted monthly attestations regarding the equivalence of issued TUSD and USD hold on escrow accounts. Since its launch in 2018, the company has collaborated with the leading US accounting company Cohen&Co. Every month, the company conducted attestations to verify that each unit of TUSD is equal to a unit of USD in reserve. However, to date, TrueUSD no longer uses Cohen&Co services, as it has implemented an automatic solution for these purposes, operating in real-time. Since 2019, TrueUSD has been cooperating with another well-known accounting company Armanino. Armanino became the first company to develop a TrustExplorer solution for confirming reserves in real-time. Utilizing Chainlink technologies, the company provides a real-time dashboard where users can accurately track how many TUSD tokens are circulating and how many USD units are in reserves. This decision was significant for TrueUSD, as users’ trust increases significantly if the attestations occur not once a month but permanently.
TUSD Use Cases
The use cases of stablecoins in general and TUSD inclusive are not limited to those listed below. As the crypto market develops and the adoption of cryptocurrencies increases, stablecoins can unlock their potential and reveal more applications. By now, TUSD can be effectively used in the following areas:
Trading. TUSD allows traders to make transactions with cryptocurrencies without hindrance. It forms a bridge between volatile crypto assets and stable real assets. Trading in pairs with TUSD, traders significantly save on exchange fees and facilitate their activities. Moreover, TUSD can be used to hedge risks associated with volatility. So, when traders are not sure that the cryptocurrency’s price will rise in the near future, they can store their funds in TUSD and not have to withdraw them from the exchange.
Money turnover. Thanks to the US dollar peg and blockchain technology, TUSD can be an effective means of money turnover. Blockchain technology allows TUSD users to send large amounts of funds without the risk of paying huge fees and a long wait. In addition, since TUSD operates on multiple chains, users can use a more cost-effective and faster one for their own purposes. For example, while TUSDERC20 is a slower and more expensive way to send funds, TUSDBEP20 or TUSDTRC20 can be sent in seconds and with minimum fees. This is highly convenient, especially for performing remittances. Since with traditional payment systems, users in some countries often pay up to 10% of the transaction amount when withdrawing funds abroad.
A store of value. TUSD allows individuals to freely enjoy the benefits and stability of the US dollar, having only access to the Internet. For example, in some African countries, most of the population is still unbanked. The banks are not ready to serve small clients and impose high service fees. In addition, the economic situation of these countries and the devaluation of national currencies push residents to use a more stable financial instrument.
B2B and international trade. The volume of money that companies send to each other amounts to billions of dollars, and the fees for completing such operations reach incredible proportions. High costs and the duration of transactions can cause irreparable damage to small and medium-sized businesses. On the contrary, TUSD allows you to significantly reduce costs and speed up financial transactions. In addition, TUSD can help business owners circumvent some of the sanctions of their jurisdictions and continue mutually beneficial cooperation.
Passive income. Many users are familiar with such a concept as a bank deposit, thanks to which they can make some profit. However, traditional deposits of fiat currencies do not have a high profitability percentage, while the DeFi sector offers tempting APY. TUSD, in turn, can be used for passive income on staking, farming, or mining in Ethereum, Tron, Avalanche, and Binance Smart Chain chains.
How to Get $TUSD?
The easiest and most affordable way to get TUSD is to buy it on the exchange. Fortunately, the token is popular and can be purchased on most centralized exchanges, including Binance, OKX, MEXC, Bitget, etc. Moreover, TUSD can be easily purchased on many decentralized exchanges such as Uniswap, SushiSwap, 1inch, and others. The user chooses a wallet for storing TUSD depending on the chain. In simple words, if you bought TUSDERC20, then wallets that work with ERC20 tokens suit you.
In addition, the user can mint new TUSD tokens using the official TrustToken app. To do this, you will need:
- Register and verify your account. That is, to enter the necessary information to pass the KYC/AML procedure.
- Create an order request to mint the required amount of TUSD.
- Deposit USD to the escrow account using the details provided in the app.
- Wait for the approval of the order (from 1 to 5 days, depending on the duration of the bank transfer).
- Get TUSD to the specified crypto wallet.
You can also use the TrustToken app to redeem the deposit and return your USD:
- Use your verified account and apply for a TUSD redemption.
- Get a secret repayment address.
- Send TUSD to the received address.
- Get fiat funds to your bank account.
Please note that the minimum redemption amount is $1000.
The TUSD stablecoin is an excellent example of how a company remains transparent and customer-oriented. Due to its existence on several leading chains, TUSD has many use cases: international trade, remittances, crypto trading, DeFi, store of value, etc. According to CoinGecko, TUSD ranks 7th by market capitalization among all stablecoins. Furthermore, users’ trust is conditioned by the transparency of TUSD: a real-time dashboard has become an excellent solution. However, the TUSD rate is less stable than USDT, so the team still needs to work on this. Nevertheless, it is worth noting that over the past two years, the price of TUSD does not fall below $0.9.