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. This is the second time in two months that TUSD has de-pegged, as it also fell to $0.9957 in June 2023.
One of the reasons for the decline is the high demand for First Digital’s FDUSD stablecoin, which Binance, the largest crypto exchange by volume, supports. Binance introduced zero-fee FDUSD trading, incentivizing users to sell their TUSD and buy FDUSD instead. FDUSD is the preferred stablecoin for staking new tokens on Binance’s Launchpad.
Bradley Park, an analyst at CryptoQuant, said that TUSD holders sold their coins as the Launchpad pool did not open, causing the de-pegging. He also said that trueUSD is related to Justin Sun, the founder of Tron and Poloniex, and its market cap is constantly shrinking due to the potential impact of the HTX and Poloniex hacks.
It is likely due to the potential impact of the HTX and Poloniex hacks, said Park.
TUSD’s Attestations And Market Share Under Scrutiny
Another factor contributing to TUSD’s loss of confidence is the lack of transparency over its attestations. Attestations are reports from independent auditors that verify the amount of US dollars backing the stablecoin. trueUSD claims to have monthly attestations from Cohen & Company, but the latest report available on its website is from October 2023.
However, some users have expressed doubts about trueUSD’s credibility and solvency on social media platforms such as Twitter and Reddit. Some have also accused TUSD of manipulating its supply and price to maintain its peg.
trueUSD’s market share has also been declining, as FDUSD has overtaken it as the fourth-largest stablecoin by market capitalization. According to CoinGecko, FDUSD has a market cap of $2.02 billion, while TUSD has $1.97 billion as of January 16, 2024. The top three stablecoins are Tether (USDT), USD Coin (USDC), and Dai (DAI), with market caps of $95 billion, $25 billion, and $5.35 billion, respectively.
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