5 Most Popular USD Pegged StableCoins in the Cryptoverse

Data & Research / 12.07.2020

What is a StableCoin?

Stablecoins are cryptocurrencies designed to minimize the volatility danger of the notoriously unstable Crypto market. In theory, a stablecoin can be pegged to a cryptocurrency, fiat money, or exchange-traded commodities (such as precious metals or industrial metals). Since the advent of USDT – Tether in 2015, traders have felt a greater sense of safety from the constant volatility of the market. Stablecoins today are blockchain-based and usually tied to traditional assets, currencies or a basket of assets and currencies.

USD is by far the most sought-after currency traditionally and has carried the same worth into the cryptocurrency market. To trade in and out of crypto, traders commonly use one or the other USD based stable coin. This gives them stability – as USD is one of the most stable national currencies and helps them take profits in times of volatility.

There is a dozen or more USD based Stablecoins in the market, each trying to fill an ever-decreasing market need. And so, we came up with a list of the most sought-after iterations of the USD stable coins.

Top 5 USD Based Stable Coins

Tether (USDT)

Considered the “Bitcoin of Stablecoins”, Tether was listed in exchanges in 2015, after which it quickly became the most popular virtual currency in the market. One of the major reasons for the quick success was that Tether filled a huge hole. Tether is basically a virtual alternative for the US dollar, that is a quick and cheap way to transfer value from one exchange to another. Tether is a crucial player in the game as it solves the stability problem among cryptocurrencies.

Tether is also the center of immense speculation, malpractice, and accusations. Tether is called a stablecoin because it was originally designed to always be worth $1.00, maintaining $1.00 in reserves for each tether issued. Yet, allegations against Tether Limited state that it isn’t the case. In several independent audits, it was seen that the reserves usually fell short of the amount claimed.

In 2019, Tether surpassed Bitcoin in trading volume with the highest daily and monthly trading volume of any cryptocurrency on the market. Despite all accusations, Tether stays the king in stablecoins list and is widely used by traders. According to the Wall Street Journal, about 80% of all BTC trading is done with the help of USDT, which makes USDT the make source of liquidity in the market.

  • Founded: 2015
  • Ticker Symbol: USDT
  • Website: https://tether.to/
  • Issued By: Bitfinex, Inc.
  • Traded on: Binance, CoinSpot, BitFinex, Kraken, etc

USD Coin (USDC)

USD Coin (USDC) is a U.S. dollar-pegged stablecoin created by the Centre Consortium, which is a joint venture between Circle and Coinbase. It was launched by Circle on September 26, 2018. USDC is unique in the sense that it was one of the first projects that realized the need for a fully regulated and transparent stablecoin. The coins are issued by regulated financial institutions, and backed by fully reserved assets, and redeemable on a 1:1 basis for US dollars. The USDC project is governed by Centre, a membership-based consortium that sets technical, policy, and financial standards for the stablecoin.

One of the key features of USDC is that they are issued as ERC-20 token. This, in theory, can support and integrate smart contracts with any Ethereum application. In late January 2019, Circle released a report that over 100 crypto-focused businesses, including exchanges, wallets, platforms, apps, and service providers had adopted USDC.

Issuance of USDC reportedly grew at the rate of more than 10 million USDC per day during the first 20 days of March 2020, against the backdrop of turbulent global equity markets and volatile bitcoin, ether, and other cryptocurrency prices.

  • Founded: 2018
  • Ticker Symbol: USDC
  • Website: https://www.circle.com/en/usdc
  • Issued By: Circle and Coinbase
  • Traded on: Coinbase, Poloniex, Binance, KuCoin, Okex, Bit-Z, and others

TrueUSD (TUSD)

TrueUSDs are distributed by TrustToken, a limited liability company linked with the blockchain sector. TrustToken aspires to provide a platform for the digitization of assets, essentially securitizing assets like real estate or precious metals and issuing smart contract-based cryptocurrencies against them. TrustToken advertises itself as the “first fully regulated USD stablecoin”, although several other projects describe themselves as the same.

TrustTokens are highly sought after because they boast one of the best and most secure withdrawal platforms. To redeem the US dollar, you transfer the KYC / AML check, send a smart contract with your TrueUSD tokens from the Ethereum registered address, and then the escrow bank will send you the funds. Your property on the account is legally recognized, and every 1 TrueUSD token you receive reminds you of a redeemable certificate of ownership for $1 through escrow.

BinanceUSD (BUSD)

In September 2019, Binance in partnership with Paxos issued a Binance stablecoin, this time pegged to the US dollar. BUSD is just one in a range of several sovereign-currency based stablecoins issued by Binance. The fact that Binance USD (BUSD) is approved by the New York State Department of Financial Services (NYDFS) makes it a trustworthy alternative to the scrupulous ones. At the time of inception, Binance had promised that they would keep the project under monthly scrutiny by a top audit firm in the hopes of attaining trust.

Unlike other stablecoins, BUSD is only listed on a few exchanges (mentioned below). This is because Binance’s USD Stablecoins is more of an in-house project than a global one. Because of this, the full potential of BUSD has not yet been seen.

As Coindesk points out, it is interesting to note that the majority of trading in BUSD, almost 40 percent market, is with Tether (BUSD/USDT), while the BUSD/BTC trading pair is second at 35 percent, according to data from CoinGecko.

GeminiUSD (GUSD)

Another important player in the Stablecoins race is the Gemini Dollar (GUSD). The project is the result of a collaboration between the Gemini Trust Company (founded by Winklevoss twins), LLC, and the New York Trust company.

As usually claimed, the token is pegged 1:1 to the US dollar and built on the Ethereum blockchain following the ERC-20 standards. Following the path laid by USDC, GUSD also follows a strict regulatory framework that keeps changing with the changing regulations.

GUSD was created as the direct competitor for the Tether cryptocurrency. Although the company was accused of non-transparent operations, according to Cameron Winklevoss, to date, none of the existing coins pegged to the dollar matches the true name of stablecoin. The Gemini Dollar cryptocurrency is under the direct supervision of the New York State Department of Financial Services (NYDFS) and is fully subordinate to US laws and regulations.

  • Founded: 2017
  • Ticker Symbol: GUSD
  • Website: https://gemini.com/dollar/
  • Issued By: Gemini Exchange
  • Traded on: Coinbase, Gemini exchange, Okex, Hotbit, Bitmart, and others
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Sudarshan M is a long time crypto-enthusiast. Pulled in by bitcoin early on, it did not take long for Sudarshan to divert all of his academic attention from business studies to blockchain by doing his Masters and eventually pursuing his PhD in the subject.