During 2017, crypto-assets saw a cambrian explosion and most popular coins skyrocketed in price. These assets have made money for many investors, but haven’t quite accomplished the goals set out by the original creators of the currencies.
Cryptocurrencies were meant not only as an investment asset, but one to be exchanged in the same way fiat currencies are used. Stability is incredibly important to a successful cryptocurrency. Current iterations of the crypto-assets have been hindered by immense price instability, preventing their entrance into consumer markets.
Stablecoins are a new trend in crypto assets that work to provide a medium of exchange cryptocurrency. The applications of stablecoins include mainstream commerce, hedging instruments for crypto traders, and remittances.
However, these stablecoins do not come without major problems. Many crypto investors are familiar with Tether, which was originally founded as a stablecoin pegged to the US dollar. Late last year, the token hit major exchanges and quickly hit a market cap of $2.2 billion. However, Tether has not done regular audits and was recently subpoenaed by the SEC, removing Tether holder’s confidence that the token has material value.
With a lack of transparency leading to the downfall of Tether in the eyes of token holders, transparency is important for a successful cryptocurrency to have a stable value. This is where new startup TrustToken’s TrueUSD offering is poised to make room for itself.
TrueUSD tokens work through an escrow-based legal structure that enable token holders to redeem tokens for US dollars. The bank accounts have a range of banking and fiduciary partners, and has committed to perform regular attestations of the funds to ensure there is 100% collateral.
Yesterday, TrueUSD lauched on Bittrex, currently the largest cryptocurrency exchange in the United States.
As the industry has learned, it’s not enough to just issue tokens and say they have material backing. TrueUSD offers a two pronged approach to fostering trust through legal protections and transparent audits. In collaboration with law firms Cooley and WilmerHale, TrustToken developed a proprietary legal framework for TrueUSD based on legal trusts and escrow accounts.
This makes the TrueUSD token truly unique in that it offers its asset holders the same protections as one would receive from a traditional investment vehicle. Investors are given legal protections that guarantee not only the security of their assets but also the value they hold.
TrueUSD’s audit system is also unique amongst cryptocurrencies. With the aid of a network of compliance partners, TrueUSD is able to offer monthly, transparent audits of TrueUSD’s assets to those interested in the cryptocurrency. TrueUSD holders are able to have high confidence in the fact that their assets are backed by real US dollars through these audits.
The rise of a stable cryptocurrency could enable the adoption of cryptocurrency in consumer markets. Coins like TrueUSD have applications in the everyday lives of many people. Sending money between countries will never have been easier, with transactions occurring at speeds and levels of security that can’t be matched by traditional methods of wire transfer.
Stable transactions would also be empowering for the growing community of app developers and content creators, who market their products around the world and have a demonstrated need for quick and reliable transaction methods.
As more cryptocurrencies begin to rise, it will be important for investors and consumers alike to keep an eye on which assets can be successful. As TrueUSD hits a major market, the time is nearer than ever when a stable and reliable cryptocurrency can become a reality.
Quick, secure, and reliable crypto assets will be integral to the future of not only investments but also everyday transactions, making startups like this one exciting to watch for as they usher in a new era of stability to cryptocurrency. Opinions expressed here by Contributors are their own.