It is no secret that cryptocurrencies are some of the most volitile assets in finance. As a result, cryptocurrency assets like USDT and TUSD have been created to keep cryptocurrency valuations more stable. When you are trading BTC pairs for example you see some big swings between BTC and the other cryptocurrency because BTC is so volatile. Tether is much less volitile than other cryptocurrencies like BTC and ETH. Let’s start by defining USDT, and explain how Tether works:
What is USDT?
Before we talk about TUSD, let’s first define what USDT is. USDT, known as tether, is a cryptocurrency asset derived from the Bitcoin blockchain, Each unit is backed by a US dollar (and other fiat currencies) held in the reserves of the Tether Limited, and can be redeemed through the Tether platform. The fiat currency is kept in a designated bank account. USDT can be used like any other cryptocurrency, and was created to facilitate the transfer of national currencies. It is meant to provide users a stable alternative to Bitcoin and to provide an alternative for “exchange and wallet audits which are currently unreliable.”
Essentially it is meant to provide an easier and more stable solution for converting to fiat currency on cryptocurrency exchanges that do not take fiat. Some exchanges that use USDT include Binance, Bittrex, and Poloniex.
Issues With USDT
There has been some controversy surrounding USDT. There is around $1.63 billion of Tether in circulation, but there are no up-to-date audits to verify that those funds are available for redemption. There is no legal guarantee of you being able to convert Tether into fiat.
What is TUSD?
TUSD serves a similar purpose to USDT. It is meant to be a stablecoin that will provide stability from the volatile swings of other cryptocurrency pairings. However TUSD is 100% backed by US dollars, and unlike USDT, offers holders “full USD collateral, regular attestations, and legal protections against misappropriation of the underlying USD.” 1 TUSD is redeemable for $1.00 USD. TUSD has a total supply of 4,761,925 tokens, which is slightly lower than Tether.
The company behind TUSD is called TrustToken. “TrueUSD is made possible by tokenizing US dollars through TrustToken’s legal and technical platform. TrustToken is a platform to tokenize real world currencies and assets.” BTC/TUSD is currently available on Bittrex, and is . Check out this guide here to learn how to exchange TUSD for US dollars and other fiat currencies.
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