The digital currencies or cryptocurrencies have continued gaining popularity over the years. However, their adoption has not been widespread due to their volatility.
The unpredictable change in the value of the currencies could see their value drop or rise dramatically and within a short duration.
Due to those erratic shifts, the coins have become difficult to use in daily transactions, international exchanges, and as a mode of payment.
Fortunately, some upcoming and new cryptos have sought to take care of this issue and bridge the gap between the blockchain technology and the current fiat currency system.
These crypto startups develop some stable digital currencies known as the stablecoins. TrueUSD is one of these stablecoins.
Stablecoins explained
Unlike conventional cryptocurrencies, stablecoins are pegged to external assets with far less volatility. These assets could be oil, gold, or other precious metals, and other items. The value of stablecoins could be based on other cryptos or fixed by algorithms.
Due to the pegging on some less volatile assets, the value of stablecoins remains similar to that of the underlying assets but does not go through crazy price swings. And this is the whole idea behind stablecoins: to maintain a steady value over an extended period.
Stablecoins have an important role in the crypto ecosystem because they allow people to enjoy blockchain benefits and not suffer the consequence of the price instabilities. Moreover, they offer a means for those who intend to park gains or assets.
The backing of the currencies with traditional assets like gold OR USD, that are less volatile gives them significant stability. As such, the stability offers a safer alternative for players in the crypto world. One of the stablecoins is TrueUSD.
Understanding TrueUSD
TrueUSD is among the new generation stablecoins that endeavor to be transparent and highly regarded due to their high standard. The currency is intended to be a transparent, simple, and reliable crypto. To live up to its benchmark, it has no hidden bank account or special algorithm.
The US dollar backs TrueUSD, and the currency developer says that 1 TrueUSD is pegged to 1 USD. With its value tied to that of the USD, it remains stable and immune from the frequent crypto pressures.
The TrueUSD’s USDs are held in various banks belonging to different trust companies, and the involved parties have agreed to publish the collateralized holdings daily and have audits monthly.
Do you want to earn some interest income by investing in crypto? You can make interest when you deposit your tusd, stablecoin on YouHolder.
The reasons for creating TrueUSD
TrueUSD was made to serve the following:
- Financial institutions – They can use reliable currency to trade in crypto markets
- Traders and exchanges – TrueUSD allows hedging against market fluctuations
- Long-term financial contracts – These include salaries, loans, and prediction markets
- Developing economies – These can benefit from stable currencies for trading
- Mainstream commerce – The digital coin allows traders to benefit from blockchain technology without exposure to the volatility
TrustToken Platform explained
TrustToken is a platform for creating tokenized assets, and it is the one behind the TrueUSD.
How TrueUSD works?
The stability of TrueUSD and the ability to facilitate the tokenization of assets is maintained through the use of third party escrow accounts as key tools. Once an organization interested in holding its assets in TrueUSD fulfills its obligations related to know your customer and anti-money laundering regulations, it transfers the required number of USD to an escrow account owned by a third party service provider. In exchange for the USD, a matching number of TUSD coins are mined and remitted, thus adding them into circulation.
Why choose TUSD?
TUSD has spectacular features, one of them being its backing by the USD, which makes it stable and reliable. Moreover, its transparency and regular audits set its aside from other stablecoins. For these reasons and others, you could consider putting your assets in TUSD.
