Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Is TrueUSD the Future of Stablecoins and Ethereum?

The TrueUSD (TUSD) or TrustToken ERC20 Token could help take Ethereum and stablecoins mainstream.

To explain, TrustToken; the organization behind TUSD, claims to be a regulated U.S. dollar stablecoin that could be the template for several Ethereum Request for Comment (ERC20) stablecoins. For instance, TrustToken’s website promises a TrueCAD (Canadian dollar stablecoin).

There are also proposals forTrueAUD (Australian Dollar stablecoin), a TrueGBP (Pound Sterling Stablecoin), TrueSGD (Singapore Dollar stablecoin), and TruHKD (Hong Kong Dollar stablecoin). Hence, TrustToken is offering a stable of stablecoins, but it is a confusing stable.

Why is TrustToken ignoring some of the world’s Largest Currencies?

Notably, TrustToken is ignoring all but two of the world’s largest currencies and three of the six most popular trading currencies. In particular, TrustToken is ignoring the world’s  second-most traded currency the Euro.

In addition, Trading Economics estimates the Eurozone composed 22.05% of the world’s gross domestic product (GDP) in 2018. In addition, the Eurozone had a GDP of $13.67 billion in 2018. Plus, the Eurozone contains the world’s fourth largest economy Germany with a GDP of $4 trillion in 2018. France, the world’s sixth largest economy, with a GDP of $2.78 trillion is also part of the Eurozone.

Moreover, TrustToken ignores the world’s third most traded currency the Japanese Yen. Japan had a GDP of $4.97 trillion in 2018, making the world’s third largest economy, Investopedia estimates.

Also absent from the TrustToken family of stablecoins are the Indian rupee. India is the world’s seventh largest economy with a 2018 GDP of $2.72 trillion. An even more glaring absence is the Chinese Yuan. The People’s Republic of China is the world’s second largest national economy with a GDP of $13.41 trillion in 2018.

China overtook the United States as the world’s largest trading nation back in 2013, The South China Morning Post notes. Plus, the Standard Chartered Bank claims China could overtake the United States as the world’s largest economy in 2020, next year, MarketWatch reports.

Why is TrustToken ignoring China and India?

China and India will be the world’s two largest national economies in 2030, the Standard Chartered Bank predicts. Thus, TrustToken is ignoring four of the world’s largest economies and two economies that could dominate global trade in 2030.

To be fair, TrustToken plans to work with three of the world’s most popular trading currencies; the U.S. Dollar, the Pound Sterling, and the Canadian Dollar. Yet TrustToken is ignoring the world’s sixth most popular trading currency; the Swiss Franc.

The Australian Broadcasting Company states; “In Hong Kong, violence is the new normal for protesters and police.” Given that reality, the Chinese Communist Party could end Hong King’s independence; and kill the Hong Kong dollar, by sending in troops.

Given these realities I think it makes sense for TrustToken to offer Euro, Yuan, Yen, Rupee, and Swiss Franc Stablecoins. In particular, the TrustToken needs to move beyond the English speaking world and the former British Empire. Note: if TrustToken wants to cover the former British Empire, why is it ignoring the old Empire’s largest country India?

What Value does TrueUSD Have?

Currently, TrustToken is only offering one stablecoin; TrueUSD (TUSD). TrustToken claims TUSD is a full collateralized stablecoin that trades on over 70 exchanges, over 160 markets, and through 20 over the counter trading (OTC) trading desks.

As a Stablecoin, TrueUSD is an Ethereum Request for Comment (ERC20) cryptocurrency that contains a smart contract or digital robot. Ideally, the TUSD smart contract pays recipients $1 from a bank account when you spend a TrueUSD token.

As an ERC20 cryptocurrency TrueUSD operates on the Ethereum blockchain. The Ethereum blockchain has some serious limitations however. In particular, Ethereum has a limited capacity for transmitting payments.

Is Trust Token Scalable?

In fact, Ethereum co-creator Vitalik Buterin admits Ethereum can only process 15 transactions a second (TPS), Invest in Blockchain claims. Thus, an Ethereum platform could crash if tries to process over 15 TrueUSD at once.

There is no mention of this lack of scalability or capacity at TrustToken’s website. That could be fatal because I think a stablecoin will need to process between 100 and 1,000 TPS to make money.

A gaming platform that can only process 15 payments at a time could drive players away, for instance. Thus platforms could be forced to make users wait to complete transactions. I do not think any gamer will wait for an hour to purchase more play or weapons. That could happen with current Ethereum technology.

I have to wonder why TrustToken is not looking into more scalable blockchain technologies such as EOS (EOS). The EOS Network Monitor estimates the EOS blockchain was processing 39 to 42 transactions per second on 23 November 2019. The highest level of EOS transactions the EOS Network Monitor has tracked was 3,996 TPS.

What Value Does TrueUSD Have?

Currently, Mr. Market assigns some value to TrueUSD (TUSD). CoinMarketCap; for instance, named TrueUSD the 37th most valuable cryptocurrency on 6 November 2019.

In detail, CoinMarketCap gave TrueUSD a Coin Price of $1.01, a Market Capitalization of $169.194 million, and a 24-Hour Market Volume of $211.801 million on 26 November 2019. CoinMarketCap based those estimates on a Circulating Supply of 167.739 million TUSD.

Therefore, I think TrueUSD has real value and real people are using it. However, I cannot see how TrueUSD is superior to other popular Stablecoins such as Tether (USDT), The Gemini Dollar (GUSD), CarbonUSD (CUSD), USD Coin (USD), Paxos Standard Token (PAX), the DAI (DAI), and the Stasis EUR (EURS).

In the final analysis, I think TrustToken is a blockchain company to watch and TrueUSD is a cryptocurrency to monitor. I advise speculators to watch TrustToken because I think its TrueGBP, TrueCAD, and TrueSGD, stablecoins could have a lot of value if they hit the market.