Cryptocurrency exchange DigiFinex on Friday replaced Tether (CRYPTO: USDT) with TrustToken’s stablecoin called TrueUSD (CRYPTO: TUSD). DigiFinex said on its website that it had concerns about the existence of U.S. dollar reserves that are supposed to fully back Tether, the eighth largest cryptocurrency in terms of market capitalization ($2.76 billion).
The Singapore-based exchange has daily trading volume of nearly $120 million.
Tether has remained controversial because of lack of conclusive audits that attest to the full backing of 2.75 billion USDT coins in circulation. In a Sept. 14 statement, DigiFinex’s management listed a couple of reasons why TrueUSD is now listed as stablecoin that replaced Tether. “[TUSD is] the world’s first stable coin guaranteed by the government and the world’s first stable coin company which receives the MSB license from U.S. regulators.” TUSD is pegged 1:1.
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Congratulations！#DigiFinex and #TUSD（True USD）have built up exclusive strategic partnership！And TUSD will be listed on DigiFinex . Deposit is available on 15:00, 15th Sep. Trading is available on 15:00, 17th Sep (GMT+8 ). TUSD is the 1st #stablecoin received #MSB.@TrustToken pic.twitter.com/uF57i2iJXz
— Digifinex Exchange (@digifinex) September 14, 2018
Audited And Regulated Stablecoin
U.S. dollars that fully back TrueUSD are held by an escrow account of a third-party independent trustee located in the United States. “The owner of TUSD is the beneficiary of the funds in the account. The fund can be converted into US dollars by wire transfer or other channels,” according to DigiFinex. Accounting firm Cohen & Co. periodically audits the escrow account and publishes the results for transparency.
Although Gemini Trust, owned by Winklevoss twins, recently claimed to have the world’s first regulated stablecoin in Gemini dollar (CRYPTO: GUSD), TrueUSD actually holds that distinction. San Francisco, Calif.-based TrustToken is a regulated money services business with U.S. treasury and the firm launched TrueUSD more than six months ago. “In that time TrueUSD grew to more than $80 million in deposits and became traded on more than 30 exchanges around the world including the largest exchanges like Binance, Bittrex, Huobi,” a spokesman told CryptoDaily.
Pegged 1:1 With USD
This summer, TrustToken raised $20 million from Andreessen-Horowitz’s new crypto fund. CEO Danny An wants to bring real-life assets such as real estate, cars, art and commodities onto the blockchain.
“TrueUSD is 100% collateralized and redeemable 1-to-1 with the U.S. dollar, and in the top 100 most traded cryptocurrencies on the market with more than $78 million in market cap,” says a spokesman. “TrustToken and TrueUSD are regulated under U.S. federal law by FINCEN.”
On Sept. 10 Gemini Trust’s competing coin, Gemini dollar, was approved as a regulated stablecoin that lets users send and receive U.S. dollars on the Ethereum network. It’s also pegged 1:1 with USD. The New York firm’s stablecoin received approval from New York Department of Financial Services (NYDFS).
Also on Sept. 10, the New York agency approved Paxos Standard’s PAX coin (CRYPTO: PAX) as stablecoin and tokenized dollar, also pegged 1:1. Paxos Standard is a blockchain-powered trust that offers settlement services.
Carbon launched on Wednesday the third stablecoin making its debut this week. CarbonUSD runs on Ethereum blockchain. Carbon chief marketing officer David Segura says the firm’s digital coin is a “compliant, price-stable cryptocurrency that is one-to-one backed with [U.S. dollar].” He adds our “whitepaper details a novel mechanism for transitioning to a hybrid fiat-algorithmic stablecoin model once CarbonUSD reaches sufficient scale as a fully fiat-backed token,” according to Sept. 12 announcement.