This week we had a new so-called stable coin enter the crypto space via the Bittrex exchange (it is also on Upbit). It is called the True USD token and is put out by the company Trust Token. So the actual unit being traded is the TrueUSD (TUSD).
The parent company promises to bridge the gap between crypto and real world assets through the use of smart contracts, tokens, and “fiduciary partners”. On their site they claim to be building tokens backed by everything from real estate to movies. Overall, the way they plan to achieve all of this is a little vague and the site uses yet another simplistic animated group of icons to explain their plan with little to no text, much like a majority of coin project websites these days. They recently had a public and private pre-sale, but I am not sure why a company launching a stable coin that is pegged at $1 would need a pre-sale, as there would be no advantage. But apparently the company wants to raise extra money so they can “realize their dream” faster as per their website for other projects they have in mind.
As it stands, TrueUSD can be obtained by submitting the proper KYC/AML info to the company. Then you wire your USD and you receive TrueUSD via an Ethereum address in return which you can use for trading on Bittrex or storing value.
Now, when you want to get your money back, the process is a little vague as to where the money comes from. On the website, TrueUSD states that after sending your tokens in to be burned off, one of their “fiduciary partners” will wire you the USD. The part that sounds sketchy is they don’t say who will even pay you, but one of their partners will. That’s sort of like if I asked for some money and told you one of my business partners will pay you back, I don’t know which one and can’t name them, but one of them will. The purpose of this seems to be so Trust Token never actually touches the money giving them some legal clearance, but it also makes the process far less transparent than would be ideal.
As of now, TrueUSD is only open for high volume traders. So whales will have some liquidity if the market crashes but everybody else will be left holding their bags. There is no date on when TrueUSD will open to everybody to redeem their tokens for real USD.
So at this point, there is no way for the average investor to redeem TrueUSD for real USD, so it’s not really a stable coin any different from Tether, it’s more of a way for whales to cash out quickly when the market crashes. But we will see if that changes in the future.
One issue I do have is that they launched on Bittrex which is a Tether exchange. TrueUSD seems to be a response to the shortcomings of Tethers, so the fact that they launched their Tether alternative on a Tether exchange is strange to say the least. Their own token can be contaminated by Tethers fake value if the allegations are true as traders can switch between different pairs and end up getting TrueUSD in exchange for Tethers.
Right now, the way that TrueUSD will end up working is not fully known. The process of getting TrueUSD and redeeming them is still not totally transparent and is only open to a select number of high volume traders. Also, right now it is only offered as a BTC pair on Bittrex with no USD pair anywhere. Tethers had a USD pair on Kraken.