TrueUSD: A Stablecoin That You Can Redeem 1-for-1 for US Dollars
We’re excited to announce the launch of TrueUSD, a stablecoin that you can redeem 1-for-1 for US dollars.
TrueUSD offers token-holders full collateral, regular attestations of escrowed balances, and legal protections against misappropriation of underlying USD.
Early access is available today for institutional accounts, hedge funds, traders, and exchanges.
We believe TrueUSD will provide a long-awaited stable trading instrument for cryptocurrency traders, and enables consumers and businesses to use a cryptocurrency as a medium of exchange.
“I’ve eagerly awaited the launch of a transparent and regulatory compliant stablecoin. TrueUSD will make it easier for BlockTower to trade cryptocurrency across exchanges. BlockTower are proud investors in and advisers to TrustToken. We’re likely to also be early users of their ‘killer app’ collateralized stablecoin, TrueUSD.”
- Ari Paul, BlockTower Capital
The Need For Stable Cryptocurrencies
The price volatility of cryptocurrencies prevents their widespread adoption.
In the mainstream economy, most businesses still find it impractical to use digital currencies. In the decentralized economy, many decentralized applications will be difficult or impossible without a basic medium-of-exchange token.
The Need for Trustworthy Currency Backing
Tether is currently the largest fiat-collateralized cryptocurrency. At the time of writing, there are over $1.63 billion of Tether in circulation, but there are no up-to-date audits to verify that those funds are available for redemption. Additionally, Tether holders have no legal guarantee that Tethers can be redeemed for traditional currency.
Protocols, decentralized apps and exchanges relying on the current solution are at risk. Ultimately, token holders need currency backing that they can trust.
Introducing TrueUSD
We wanted to build a stablecoin that we would use and trust ourselves. TrustToken is a platform to create asset-backed tokens that you can easily buy and sell around the world. For example, gold to gold tokens or dollar to dollar tokens. Our first asset token is TrueUSD, a stablecoin that you can redeem 1-for-1 for US dollars. TrustToken partners with registered banks and fiduciaries to securely hold the funds backing TrueUSD tokens. For increased security, the banks and fiduciaries handle all funds directly. The TrueUSD system does not handle or have access to the escrowed funds.
When you complete the KYC/AML process and wire funds to the third party escrow accounts, an equivalent amount of TUSD is freshly minted to your ethereum address. Each TUSD represents a redeemable certificate for $1 from the escrow accounts holding the underlying USD.
Here’s what this means for users of TrueUSD:
Legal Protection
As one of the most widely used legal vehicles for managing other people’s money, escrow accounts enable regular attestations and strong legal protection for token holders [1]. See the FAQ for more details.
Redeemable for USD
Any institution or individual with a verified TrueCoin account that passes a standard KYC/AML check can redeem TrueUSD for USD. During the current alpha version, there is a $10,000 minimum on redemptions. This amount is common for our current institutional users, and we aim to reduce this minimum for retail users in the future [2].
Trustworthy Fund Management
Our legal framework enables you to exchange USD directly with escrow accounts — we never touch the funds. Instead, you send USD to or receive USD from one of the escrow accounts in our network of fiduciary and banking partners to purchase or redeem TrueUSD. This reduces the counterparty risk that is common in other collateralized stablecoin projects.
Full Collateral
Every TrueUSD is always fully collateralized by USD, held in a professional trust company’s escrow account. Our publicly audited smart contracts mint TrueUSD when USD clears the escrow accounts and burns TrueUSD when USD is redeemed to ensure a 1:1 parity between the TrueUSD in circulation and USD in the escrow accounts.
Regular Attestations
The escrow account holdings are published regularly and subject to ongoing professional attestations. We regularly undergo independent third-party evaluations by leading auditors such as Cohen & Co. to ensure best security practices.
We’re starting with USD, and we can extend this model to other fiat currencies like Euro and Yen, precious metals like gold and diamonds, and even baskets of assets like stocks and real estate.
How will TrueUSD maintain price stability? Price deviations between TrueUSD and USD present an opportunity for arbitrageurs. Since traders can always trade TrueUSD for the equivalent USD on TrueUSD.com, there will be an incentive to buy or sell mispriced TrueUSD on exchanges and convert on TrueUSD.com.
[1] Someday, governments may allow for direct legal representation by digital entities, eliminating the need for a human intermediary to open a bank account. Until then, we can take a practical hybrid approach by interfacing with escrow accounts, a part of modern legal infrastructure that already offer solid legal representation. See the FAQ for more.
[2] In the alpha version of TrueUSD, redemptions will be restricted to a $10,000 minimum. Anyone can use TrueUSD once they are listed on exchanges.
Who Can Use TrueUSD?
TrueUSD opens the door for mainstream commerce to use digital currencies, and for blockchain-based applications to trade and transact with confidence.
- Crypto Traders and Exchanges: Cryptocurrency traders want a trustworthy stablecoin to hedge against volatility, and enter crypto markets without immediate exposure to BTC/ETH. TrueUSD is currently available on Bittrex and Upbit. Binance has announced they will list TrueUSD as a trading pair with Binance Coin, Bitcoin, and Ethereum on May 22, 2018.
- Mainstream Commerce: Everyday people and businesses can enjoy the benefits of digital currencies (faster transaction speed than ACH, global reach) without the volatility of Bitcoin. Now you can pay salary, take out a loan, or buy coffee with a cryptocurrency, enabling a new economy of cryptocurrency financial applications.
- Long-term Financial Contracts: Stable cryptocurrencies enable smart contracts that are enforceable over time, such as prediction markets, salaries, and loans.
- Developing economies: Some developing markets are increasingly reliant on cryptocurrencies for trade.
- Financial institutions: An asset they trust (USD), in a legal vehicle they’re familiar with (escrow accounts), to make trades in the crypto markets.
Collaboration With The Community
We’re doing this in response to huge demand for a trustworthy stablecoin from the crypto community.
TrueUSD uses our TrustToken platform to offer token-holders legal protection and regular attestations. We believe that creating a trustworthy, USD-backed stablecoin (by tokenizing US Dollars) is a powerful application of our platform, and addresses an important problem for the crypto community.
How you can contribute
- We’re always happy to talk with traders, exchanges, and advisors who are interested in collaborating. Please email partner@trusttoken.
- If you or someone you now would enjoy a key role at a fast-growing startup with high standards for authenticity and value creation, please apply here.
Timeline
Summer and Fall 2017
✓ Complete the SmartTrust, start developing TrustProtocol for auditing and insurance.
December 2017
✓ Establish partnerships with banks and exchanges, continue to develop TrustProtocol, and do a pre-sale fundraising round for the TrustToken Platform on which TrueUSD is built.
January 2018
✓ Support wire transfer purchases/redemptions.
✓ Deploy TrueUSD smart contract, begin capitalization of the TrueUSD accounts.
✓ Launch the alpha version of TrueUSD for traders and organizations.
February 2018
○ List TrueUSD on exchanges.
2018 and beyond
○ Launch the beta and 1.0 versions of TrueUSD for general access.
○ Develop more stablecoin products such as TrueEuro, TrueGold, and baskets of tokenized commodities, to provide more trustworthy options for cryptocurrencies backed by real-world assets.
See more
- See more technical and legal details on the FAQ page.
- Subscribe to the TrueUSD newsletter
- Follow us on Twitter
- Like us on Facebook
Contact
General: hello@trusttoken.com
Media: media@trusttoken.com
Legal inquiries: legal@trusttoken
Advisors, exchanges, traders: partner@trusttoken.com
