Stablecoins are becoming an increasingly important part of crypto investing. They give investors the ability to trade in-and-out of fiat currencies in a quick and easy way. This is particularly crucial in such a volatile market like crypto.
While Tether was the first major stablecoin that is used by many in the crypto community, it has come under a lot of criticism and new projects like TrueUSD are providing some much needed alternatives.
What is it?
TrueUSD is a token you can redeem 1-for-1 for US dollars. It uses TrustToken’s smart contracts to ensure 1:1 parity.
The team at TrustToken created TrueUSD. TrustToken is a new protocol hoping to tokenize the world’s assets. The founders are Danny An (CEO), Rafael Cosman (CTO) and Stephen Kade (COO). All of them are technical and have exceptional backing from the world's leading investors.
Tether is a token that you can redeem 1-for-1 for US dollars. It was set up by the team at Bitfinex and was the first stablecoin to market. Because it was the first-mover, it has gained and maintained its leadership position, even after heavy criticism.
What is unique about it?
The main difference between Tether and TrueUSD is that TrueUSD uses the TrustToken framework to ensure the process is legitimate. Their legal framework enables buyers to exchange USD directly with an escrow account. They never touch the funds themselves.
According to TrustToken “The bank account holdings are published regularly and subject to monthly professional attestations”.
So far, they’ve been good on their word.
Tether was the first major stablecoin to be adopted by most exchanges and investors.
Its availability across many exchanges makes it a useful currency to buy and sell other cryptocurrencies.
How safe is it?
TrueUSD's transparency and general business practices lead us to believe it is a very trustworthy operation. It's a high-quality team, with high-quality backers who are very transparent and have best-in-class operations to ensure all money is accounted for.
Because of Tether's lack of transparency and dubious behaviour, we can't recommend it as a safe option to use as a stablecoin.
Find out more?
If you use an exchange the uses both TrueUSD and Tether, there’s no question you should be using TrueUSD. It’s backed by a far more legitimate process and team.
Due to people's dismay over Tether's lack of transparency, TrueUSD is growing at breakneck speed. Having only launched in June with very limited partners, their market cap is already $62 million and growing much faster than Tether.
Given Tether’s shaky past, we recommend cautiously using the token.