The trueUSD (TUSD) stablecoin, which is supposed to be pegged to the US dollar, has dropped below $1 and is currently trading at $0.988, according to CoinDesk Indices data. The de-pegging by TUSD marks the second time in two months as it fell to a low of $0.9957 in June 2023.
Moreover, Reasons behind the downfall include the high demand for First Digital’s FDUSD stablecoin, which Binance, the largest crypto exchange by volume, supports. The exchange has an announcement about its zero-fee trading for FDUSD. This encourages users to sell their TUSD and opt for FDUSD instead. Certainly, the most-used stablecoin in Binance Launchpad to stake new tokens is with FDUSD.
Bradley Park, an analyst at CryptoQuant, noted TUSD holders selling coins toward de-pegging them on this issue pool while the Launchpad pool did not open. He observes that TrueUSD is solely linked to Justin Sun, the founder of Tron and Poloniex, and notes that its market cap has been consistently declining. Sources attribute this decline to potential effects stemming from the HTX and Poloniex hacks.
Park noted that there are still some nagging issues about the effects of the HTX and Poloniex hacks.
TUSD’s Attestations & Market Share Face Scrutiny
The opacity surrounding attestations has contributed to the erosion of confidence in TUSD. Many question the lack of transparency in this aspect, adding to concerns about the stablecoin. Independent auditors reported attestations confirming the amount of US dollars supporting the stablecoin. TrueUSD claims to undergo monthly attestations from Cohen & Company. However, the latest report available on its website is for October 2023.
However, some users in forums like Twitter and Reddit question the authenticity and solvency of trueUSD. Some individuals have expressed skepticism about using TUSD, accusing it of employing methods they perceive as manipulating supply and price. These skeptics allege that someone employs such tactics to maintain the stablecoin’s peg.
Furthermore, trueUSD’s market share has declined as the fourth-largest stablecoin by market capitalization is FDUSD. According to CoinGecko, the financial amount of FDUSD is $2.02 billion, and TUSD is $1.97 billion on January 16, 2024. The top three leaders among stablecoins are Tether (USDT), which is worth $95 billion; USD Coin (USDC), which is worth $25 billion; and Dai (DAI), which is worth $5.35 billion.
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