Working Principles
TrueUSD (TUSD) is a stablecoin cryptocurrency designed to maintain a stable value at $1 USD. It is part of a family of stablecoins known as TrustToken. TrueUSD is known for its transparency and focus on regulatory compliance. Here’s an overview of TrueUSD, including its owner, uses, working principles, limitations, current value, and how to buy and sell the coin.
1. Owner: TrueUSD is issued by TrustToken, a fintech company specializing in asset tokenization. TrustToken manages and operates the TrueUSD stablecoin.
2. Uses: TrueUSD serves several key purposes within the cryptocurrency ecosystem:
- Stable Store of Value: TrueUSD is designed to maintain a stable value at $1 USD. It can be used as a stable store of value, particularly when users want to avoid the price volatility commonly associated with cryptocurrencies like Bitcoin and Ethereum.
- Cross-Border Transactions: TrueUSD is used for cross-border transactions and remittances due to its stable value. Users can send it quickly and cost-effectively across borders.
- Trading and Investments: Traders and investors use TrueUSD to exit volatile cryptocurrency markets and reduce their exposure to market fluctuations.
3. Working Principles: TrueUSD’s stability is achieved through a system that is centered around transparency and trust:
- TrustToken’s Custody Model: TrustToken follows a full reserve model, meaning that every TUSD token in circulation is backed by an equivalent amount of USD held in escrow accounts. These accounts are regularly audited by third-party firms to ensure the one-to-one backing.
- Regular Audits: TrustToken provides transparency by conducting regular third-party audits to verify the token’s reserves, which are published on their website for public scrutiny.
- Regulatory Compliance: TrueUSD is designed to adhere to legal and regulatory requirements, which helps to build trust with users and institutions looking for a stablecoin with regulatory compliance.
4. Limitations:
- Centralization Risk: While TrueUSD aims for transparency and regulatory compliance, it does rely on the custodial model, which means users must trust TrustToken to maintain proper reserves. In this sense, it is more centralized compared to decentralized stablecoins like DAI.
- Dependency on TrustToken: The value and integrity of TrueUSD depend on TrustToken’s ability to maintain proper reserves and meet regulatory requirements.
- Exchange Availability: While TrueUSD is traded on many exchanges, its use outside the cryptocurrency space can be limited.
5. Current Value: TrueUSD is designed to have a stable value at $1 USD. Unlike other cryptocurrencies, its price should remain relatively constant with only minor fluctuations due to market dynamics.
6. How to Buy and Sell TrueUSD: To buy and sell TrueUSD, follow these general steps:
a. Choose a Cryptocurrency Exchange: Select a cryptocurrency exchange that supports TUSD trading. Most exchanges offer TUSD trading pairs, especially those that emphasize stablecoins.
b. Create an Account: Sign up for an account on your chosen exchange and complete any required identity verification.
c. Deposit Funds: Deposit funds into your exchange account using methods such as bank transfers, credit/debit cards, or other cryptocurrencies.
d. Place an Order: Use your deposited funds to place a buy order for TUSD at the current market price or set a specific price if you want to wait for a better deal.
e. Secure a Wallet (Optional): While TrueUSD can be stored in wallets that support ERC-20 tokens (most of them are based on the Ethereum blockchain), many users keep their TUSD on exchanges since it’s primarily used for trading and liquidity.
f. Selling TrueUSD: To sell TUSD, place a sell order on the exchange when you decide to do so. You can exchange it for another cryptocurrency or fiat currency, depending on the trading pairs available on the exchange.
Always exercise caution when investing in cryptocurrencies, and make sure to be aware of the regulatory environment in your region, as it can affect your cryptocurrency activities. TrueUSD is designed to be a stable store of value, and its value should remain close to $1 USD.
