Stablecoins have become a crucial part of the cryptocurrency industry. The stablecoin industry was started with Bitfinex’s Tether (USDT) years ago. At the time, USDT promised low volatility and every single one of their coin would be backed by 1 USD in their bank account. The idea of Tether was to fasten crypto adoption in the real world. Volatility has been one of the biggest issues in crypto adoption. Many merchants in the real world do not want to deal with the volatility and they have an insecurity that they might lose 10% of their money the next day if they hold the cryptocurrency they receive from customers.
Tether was created to solve the volatility problem for real-world adoption as well as to help traders open and close their positions easily without the need to go to fiat (which need days just to withdraw from one crypto exchange). The idea was great, but the Tether team has been very controversial with transparency issues for USDT. In the beginning, they promise transparency and regular audit by a third-party auditor. However, since a few years ago, Tether has been facing difficulties with transparencies. There were many unfulfilled audit promises, and to this day Tether (USDT) remain the most controversial cryptocurrency in the industry due to lack of audit, transparency, and mass-printing of new USDTs.
TUSD and Transparency
Many figures pointed their finger to Tether team and stating that mass-printing of new USDTs did not actually backed by real dollar reserves in the Tether team’s bank accounts. This is where TrueUSD (TUSD) tackles the transparency issues. The project was started by the TrustToken team in 2018. TrustToken believes TUSD is the real and ‘true’ stablecoin that will honor audit and transparency promises. To this day, TUSD is still regularly audited by Cohen & Company.
Many crypto traders who have lost their faith in USDT now put their trust in TUSD (well, as long as TUSD keeps their promise to be regularly audited). TUSD also has advantages from a technical perspective because it utilizes the most popular blockchain for token creation, which is Ethereum blockchain. USDT has ERC20 version as well, but it was started from OMNI.
Apart of TUSD and USDT, there are other stablecoins like USDC and PAX. You can read more about them in our Stablecoins article if you are interested.
TUSD vs. USDT from trading volume perspective
At the end of the day, trading volume matters a lot to decide which stablecoin is the real winner. Despite their potential use cases for the future, currently the biggest use case for stablecoins is still to ‘hedge’ against crypto volatility. Many traders do not want to withdraw directly to fiat and rather trade cryptocurrencies against stablecoins whenever they want to take profit.
For example, if someone trades on Binance, and he wants to move his money from Binance to Huobi or other exchanges, it’s very likely the same trader prefer to put his money on stablecoin like TUSD or USDT so he can go ‘long’ again whenever he believes Bitcoin or altcoin price is about to go up.
From the above images, you can see both TUSD and USDT have great trading volumes. However, USDT is still the status quo with more than $19 billion trading volume in the past 24 hours. Meanwhile, TUSD (second biggest stablecoin in terms of trading volume) has only $203 million trading volume within the same period of time. According to CoinMarketCap, TUSD’s biggest trading volume is with BitForex and then followed by Binance in the second place. Many people within the crypto community accuse CoinMarketCap of being ignorant when it comes to wash trading volume, and people assume Bitforex trading volume is not real.
Meanwhile, according to CoinMarketCap, USDT’s biggest trading volume is with OKEX, Coinbene, Bit-Z, and Binance. Once again, many people doubt that most of these trading volumes are actually real but USDT remains the biggest stablecoin on the market. So, although most of the trading volumes are not really real, the liquidity remains huge for USDT.
What The Future Holds For TUSD vs. USDT
The future remains unknown as the crypto space itself still has a lot of things to prove to the mainstream world. However, stablecoins have pretty big potential other than just as a hedging tool for daytraders. If one day stablecoins become more commonly used outside the crypto exchanges, most likely TUSD will have better future vs. USDT. This is the more likely outcome considering USDT is very controversial, and it is not fully backed by real USD in Tether’s bank accounts. Meanwhile, TUSD team (for now) looks like they are much more responsible and transparent with their regular audit processes.
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