Cryptocurrency: Bittrex offers new USDT:TrueUSD stablecoin pair
The stablecoin pair brings more options for customers and chips away at Tether's dominance.
In what might be a world first, customers can now trade one stablecoin for another on Bittrex, in the form of a new TrueUSD to USDT Tether pairing. Both are specifically designed to be backed one to one by real US dollars and to remain worth almost exactly one US dollar.
On the surface, there might not be a lot of reason to trade one for the other if both are ostensibly worth the exact same amount. However, the real practicality might be as a way of letting customers get more perceived security from the ongoing situation and doubts around Tether.
TrueUSD claims to have all their real USD collateral held in audited, transparent bank accounts and to use a set of escrow smart contracts to deliver backed cryptocurrency to its users. By contrast, Tether is a company that simply claims to have enough USD to back up all USDT Tethers in existence. They "print" more Tethers on behalf of customers, mostly cryptocurrency exchanges and Bittrex in particular, who want digital US dollars. However, Tether has never been publicly audited and there's been a lot of speculation around whether it actually has enough funds to back all the Tethers in existence.
TrueUSD appears to be a direct competitor looking to do almost exactly what Tether does, except more transparently. As such, some customers might appreciate holding TrueUSD rather than Tethers.
They're not the only stablecoins out there though. Stablecoins are tokens that are designed to remain pegged to a specific price in order to avoid the fluctuation that goes along with cryptocurrency.
Most are backed by collateral, much like how True USD and USDT are backed by the collateral of fiat dollars in a bank.
But there are probably around a dozen which are backed by gold, including the Australian government-owned Perth Pint cryptocurrency and at least one backed by Ethereum, called MakerDAO. These stablecoins use a series of smart contracts to maintain stability.
Meanwhile, the newest generation of stablecoins includes more ingenious options, such as Havven and the USDX Protocol, which have devised different systems for maintaining price stability by backing themselves without its own paired token economy and without needing any outside collateral.
There's a serious need for wider use of reliable stablecoins in the market, especially with so much uncertainty around Tether.
A stablecoin trading pair might be a laughing matter, but it's no joke.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.
Latest cryptocurrency news
- Ethereum price plummets as crypto industry’s combined market cap drops by 10% within hours
- Bitcoin price dips below key level as Russia prepares for a blanket crypto ban
- Retroactive airdrop farming: How to prepare yourself for 2022
- Ethereum price continues downward spiral while a major competitor posts gains of 50%
- Bitcoin’s price stagnation a cause for concern as key indicators continue to dip
Picture: Shutterstock
