TrueUSD (TUSD), launched in 2018 by TrustToken, is a fiat-backed stablecoin pegged 1:1 to the US dollar. This means that for every TrueUSD issued, there is an equivalent US dollar held in reserve.

Why is this important? After the $40B TerraUSD (UST) collapse and the USDC depeg panic during the 2023 banking crisis, trust in stablecoins isn’t what it used to be. With TrueUSD, everything is out in the open, and there is no smoke and mirrors to figure out.

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Key takeaways:

• TrueUSD backs every token with an actual dollar held in escrow accounts backed by attestations of its reserves, verified by independent third party institutions. 
• TrueUSD uses Chainlink’s Proof of Reserve technology. 
• TUSD has practical applications for trading and investments in the crypto space, such as remittance, payments, and DeFi.

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The importance of transparency for Stablecoins

1. Real-time verification

Unlike other stablecoins that operate in secrecy, True USD takes transparency seriously by offering daily attestation of its reserves.  

This means that users can verify, at any time, that every TUSD token is backed by real dollars. 

2. Integration with Chainlink Proof of Reserve

TrueUSD uses Chainlink’s Proof of Reserve technology to enhance transparency even further. 

This tech further verifies off-chain USD reserves, ensuring that what’s promised on paper exists.

3. Third-party verifications

In the finance world, trust is earned, and TrueUSD knows this and backs its reserve claims with third-party audits from reputable firms like The Network Firm LLP and MooreHK. 

These independent verifications by third parties help ensure that TUSD reserves remain fully backed and secure in the eyes of the world.

What sets TUSD apart, & how does it maintain its USD peg?

1. U.S. dollars fully back TUSD

TUSD is a proven stablecoin, meaning that every TUSD token is truthfully and verifiably backed 1:1 with real U.S. dollars. 

Reserves are held in secure third-party escrow accounts. There are no algorithms to analyze, no unverifiable partial reserves, just straightforward collateralization.

2. TUSD makes use of transparent and regular audits

One of the main factors that sets TUSD apart and keeps things above board is that independent third party institutions regularly audit TUSD’s reserves. These reports are made public, so users always verify that USD reserves fully back tokens. 

3. There is direct redemption for USD

Another way that TUSD maintains its peg is by allowing users to redeem tokens directly for U.S. dollars. This reliable convertibility helps keep the price stable and ensures that each TUSD is always worth $1.

How does TUSD work?

TrueUSD (TUSD) is a stablecoin designed to stay locked at a 1:1 ratio with the U.S. dollar—meaning one TUSD should always equal one USD. But how does it actually manage that? 

• Dollar-for-dollar backing – Every TUSD in circulation is backed by an actual U.S. dollar sitting in reserve. There are no complicated algorithms, no funny business—just straightforward collateralization.
  
• Trusted third-party custodians – TUSD itself doesn’t hold those reserve dollars. Instead, they’re stored in escrow accounts managed by regulated financial institutions, reducing the risk of any one entity having too much control.
  
• Real-time verification—Transparency is a big deal. Thanks to Chainlink’s Proof of Reserve technology, anyone can verify at any time that the token supply matches the amount of USD in reserves. There is no need to take anyone’s word for it.
  
• Issuance process—Want TUSD? Deposit U.S. dollars with a participating escrow partner. Once the funds are confirmed, TUSD tokens are minted and sent straight to your wallet.
  
• Redemption process – Need cash instead? Send your TUSD back to the platform, and after verification, you’ll receive the equivalent amount in U.S. dollars. The returned tokens are then burned to keep the supply in check.
  
• Ethereum-based (but not limited to it): TUSD follows the ERC-20 standard, meaning it works seamlessly with Ethereum wallets and decentralized apps. But it doesn’t stop there—it’s also available on blockchains like Binance Smart Chain and Tron, making it more versatile.

Benefits of using TrueUSD (TUSD)?

Here is why TrueUSD stands out in the crypto world. 

1. TrueUSD offers stability in an often wild market

It is not uncommon for crypto prices to swing like crazy, but TUSD stays steady. As a stablecoin fully backed by U.S. dollars, traders can quickly park their funds in TUSD to ride out market turbulence. All this can be done without having to cash out to a bank.

2. For TUSD, transparency is not just a buzzword

As the crypto world evolves, some stablecoins often make big claims but offer little proof. 

Here’s where TUSD is different. The stablecoin undergoes regular third-party attestations, so anyone can verify that every token in circulation is backed by actual dollars sitting in regulated financial institutions. With such measures in place, there are no mysteries to solve, just full transparency supported by reliable data.

3. Fast, low-cost transactions

Because it is built on multiple blockchains (Ethereum, TRON, Avalanche, and more), TUSD lets you send money almost instantly with minimal fees. For all those trading, using DeFi, or making cross-border payments, it’s quick and cost-effective.

4. Compliance and security

Security and compliance are mandatory aspects of building trust in the financial world. Consequently, TUSD follows strict regulatory standards, including routine audits and anti-money laundering (AML) policies. This minimizes counterparty risk and makes it a safer bet than some less-regulated alternatives.

5. TrueUSD is widely supported for trading & DeFi

TUSD is well-known and widely available on major exchanges and DeFi platforms, making it easy to trade, stake, or use for lending. Its stability makes it a go-to choice for hedging, remittances, and earning passive income in the crypto space.

📝A quick note on safety

While TUSD is fully backed and regulated, the crypto space always evolves. Keep an eye on regulatory updates and stick to reputable platforms when trading or holding TUSD. A little diligence goes a long way in staying secure.

How the crypto world uses TrueUSD (TUSD) (Real-world use cases)

TUSD is a practical tool appropriate for a range of real-world and crypto-native use cases. 

Here’s where TUSD is useful:

1. Stability makes TUSD useful for trading and hedging 

When markets get shaky, traders move into TUSD to protect their funds from wild price swings. This move is a reliable way to stay in crypto without the volatility risk.

2. TrueUSD is used for DeFi lending and learning 

TUSD is widely used on DeFi platforms for lending, borrowing, and earning passive income through interest or staking. This stability makes it a go-to choice for these financial moves.

3. Fast and stable payments make TUSD great for transactions

For crypto users who need cross-border remittances or business transactions, TUSD offers a quick, low-cost alternative to traditional banking without the headaches of currency fluctuations.

Some potential downsides of stablecoins

Stablecoins like TUSD have many advantages, but like everything else in the crypto world, they’re not without risks. 

Here are a few potential risks to keep in mind:

1. TUSD could face negative regulatory action

Since TUSD is pegged to the U.S. dollar, the coin is subject to US and other financial regulations that could evolve negatively over time as government regulations change. Changes in government policy might impact how TUSD  operates or who can use it for financial transactions.

2. Centralized oversight could impact TUSD’s stability

 Unlike decentralized cryptocurrencies like Bitcoin, TUSD is managed by TrustToken, a private company with a huge potential risk. 

TUSD’s stability could be impacted because users have to trust the private team to maintain reserves, ensure transparency, and follow regulations.

3. Reliance on third-party custodians  could negatively impact TUSD’s standing

According to financial records, the dollars backing TUSD are held by external financial institutions. If any of these third-party custodians face legal trouble, bankruptcy, or mismanagement, it could affect the coin’s stability.

4.No on-chain collateral

Unlike decentralized stablecoins like DAI, which use crypto-backed reserves, TUSD relies entirely on off-chain U.S. dollar reserves. That makes it less aligned with the ideals of decentralization.

5. Tough competition

The stablecoin market is crowded, with giants like USDT and USDC dominating the space. If users see those as more reliable or convenient, TUSD could struggle to keep up.

Storing TUSD

TUSD, as an ERC-20 token, works with most Ethereum-compatible wallets, from Ledger to MetaMask. Popular choices include:

• Hardware wallets (Ledger, Trezor) for maximum security.
• Software wallets (MetaMask, Trust Wallet) for convenience.
• Exchange wallets (if you plan to trade frequently, though this is less secure).