TrustToken, a global platform for tokenizing fiat currencies and real-world assets backed by Stanford-StartX, FJ Labs, and BlockTower Capital, launched TrueUSD, reportedly the first fiat-backed stablecoin to offer token-holders legally protected certificates of ownership of US Dollars. Seeking to claim wary Tether customers – especially given the platform’s late 2017 hacking– TrueUSD aims to offer a more stable trading instrument for cryptocurrency traders, and enables consumers and businesses to use a cryptocurrency as a medium of exchange.
“Today’s investors and traders need a non-volatile medium of exchange that’s credible and trustworthy,” opined TrustToken Co-Founder & CTO Rafael Cosman. “TrueUSD enables investors to put large sums of money into crypto without immediate Bitcoin exposure and quickly hedge against volatility.”
Extreme volatility and the approximate 40% drop in the price of Bitcoin in 2018 alone has underscored the need for a price-stable cryptocurrency. Exchanges, protocols, decentralized apps, and businesses that accept digital currencies are all at risk. Enter TrueUSD. TrueUSD offers full collateral, regular auditing, and legal protection for token-holders to redeem TrueUSD for fiat currency. TrueUSD aims to displace Tether as the industry-standard stablecoin due to TrueUSD’s advanced security and legal protection.
TrueUSD, the first token on TrustToken’s TrueCoin service, uses modern custodial and escrow agreements to provide higher standards of security for token-holders. Unlike Tether, TrueUSD custodial accounts are subject to regular auditing and offer strong legal protection for token holders. What does this mean? According to the platform, any institutional token-holders who pass a KYC/AML check can always redeem one TrueUSD token for one USD directly from a TrueUSD partner bank, said the platform. TrueUSD connects users directly with its partner banks, and never touches the funds directly. TrueUSD will offer a series of stable cryptocurrency products, starting with TrueUSD and other traditional currencies and financial assets.
“I’ve eagerly awaited the launch of a transparent and regulatory compliant stablecoin. TrueUSD will make it easier for us to trade cryptocurrency across exchanges,” shared BlockTower Capital Co-Founder and Trust Token Advisor Ari Paul. “We are proud investors in and advisers to Trust Token. We’re likely to also be early users of their “killer app” collateralized stablecoin, TrueUSD.”
Anyone can use TrueUSD for trade and payments. TrueUSD has been designed to address the needs of mainstream commerce, cryptocurrency traders, and financial companies:
- Mainstream commerce – Anyone can enjoy the benefits of digital currencies (faster transaction speed than ACH, global reach) without the volatility of Bitcoin. Now users can pay a salary, take out a loan, or buy coffee with a cryptocurrency, enabling a new economy of cryptocurrency financial applications.
- Crypto exchanges – Offer the ability to price assets in terms of USD (aiming to replace Tether).
- Crypto hedge funds and traders – Introduce a trustworthy, stablecoin to hedge against volatility and allow for market entrance without immediate exposure to BTC/ETH.
- Financial institutions – Provide an asset they trust (USD), in a familiar legal structure (custodial accounts), to make trades in the crypto market. Crypto startups may be comfortable with algorithm-based stablecoins, but traditional financial companies may prefer asset-backed tokens.
The TrueUSD token launched last week on TrueCoin.com in a raise open to traders and exchanges, planning to do more than $100,000 in volume per month, and will soon open to lower-volume entities. TrueCoin has developed its legal framework for collateralized cryptocurrencies in collaboration with WilmerHale and Arnold & Porter, and has a growing network of fiduciary, compliance, and banking partners.
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