Why Investors Should Pay Attention to TrueUSD
Stablecoins are a topic that not everyone understands, but they are a very key part of the entire cryptocurrency financial system. As much as people want to believe Bitcoin is going to become the perfect replacement for the USD, it is not looking like it can maintain use as both a store of value and a medium of transfer. That creates a massive opportunity for another coin to jump in and complete the package.
What is TrueUSD?
Developed by the Trust Token project, TrueUSD is their first venture into asset-backed tokens and tokenization. The project was released in March 2018, TrueUSD is a stable coin that is intended to mimic the exact value of the US dollar. It is ranked 50th in terms of market capitalization, and is linked back to bank funds in escrow in order to back the value of the coin.
There are several coins competing for the same position, with Tether being the most well-known. Tether faced controversy regarding rumours of them not holding the appropriate amount of USD as collateral for the coins. This essentially makes them speculative project who are conjuring USD out of thin air, which adds volatility to the coin.
Price volatility has been the main issue with stablecoins thus far. Steem Dollars and DigixDAO have also had issues maintaining parity with their respective assets. As mentioned before, the fact that TrueUSD holds their bank funds in escrow accounts with fiduciary institutions is a major factor in ensuring sufficient backing and trustworthiness of the project.
The Appeal of Stablecoins
Stablecoins answer a key problem presented by the new financial infrastructure: what do you do when you don’t want to hold risky assets? The purpose of these coins is to “keep you there once you arrive”. Say you’ve made your “nut”, you need something to put your money in for safekeeping. You won’t get a natural rise in value using this, but you won’t lose either.
Additionally, how many of us have heard the idea that we are entering a cashless society? In terms of being resistant to censorship and having full control of your money, this would be a disaster. So if you believe in much of the mission of Bitcoin.
Why to Buy TrueUSD
TrueUSD will not make you rich anytime soon, but it will help you preserve your capital. Many exchanges for altcoins don’t allow you to hold USD in your account, and not everyone wants to have all their money tied up in volatile assets all the time.
As one would expect for a stablecoin, the TrueUSD is currently trading at $1.00. There have been fluctuations during “attacks”, but it has mostly held its value over time.
Bittrex and Binance (as well as 10+ other exchanges) offer trading of TrueUSD, so it is definitely gaining traction. So my recommendation is, rather than cashing out of your altcoin profits by selling to Bitcoin, sell to TrueUSD and take some volatility off the table.
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