Q&A With Tory Reiss From TrustToken: TrueUSD and the Future of Stablecoins
TrustToken launched TrueUSD at the beginning of the year in response to increasing concerns over the volatility of the cryptocurrency market in general as well as the increased speculation around Tether, another USD-pegged stablecoin.
We had the pleasure of sitting down with Tory Reiss who leads TrustToken’s partnership development and relationships with exchanges. Our wide-ranging interview covered a number of hot topics in the crypto industry as well as TrustToken and its long-term vision for TrueUSD, which Reiss would like to see become the quote currency for the world’s crypto exchanges.
Tell us about your responsibilities at TrustToken and your recent change in title.
My title recently changed to Vice President of Corporate Development and Product Strategy to better reflect my responsibilities. I did lead TrustToken’s fundraising, so corporate development is a more appropriate title.
In terms of funding, we took a very different approach to fundraising than most crypto companies in that we really required extensive due diligence on every single investor that participated in our strategic round. What I mean by that is that we wrote a fairly extensive application that included reference checks and that required them to explain how they’re going to add value to our longer-term mission.
At the same time, we consciously tried to deter any of the investors that were looking for any sort of short-term investment, because the nature of what we’re trying to do is such that it’s going to take years, and we know that, and so we want investors who understand that and have bought into the long-term vision. We were very transparent with our investors that if you want to maximize your value this should be something you would be willing to hold on to for 5 to 10 years. We’re thinking like Jeff Bezos at Amazon who is known for his 10-year planning sessions. That’s how we think. It’s a little bit different than most crypto companies.
For example, we have a one-year lockup on investors, which is almost unheard of in crypto, since so many investors in the cryptosphere are looking for short-term investment. A one-year lockup means that it will be a year before they can go and sell tokens or do anything with them. The good news is it turned away a lot of short term investors, but it really attracted the high-quality investors like Andreessen Horowitz and Jump Capital.
TrueUSD can now be traded with BNB, BTC and ETH. What other pairs are planned for the future?
We’re also traded against Tether. What’s fascinating about that is that it’s the largest volume pairing that we have listed right now. Yet 90% of the people selling are selling out of Tether into TrueUSD. So that’s a really good sign of the market’s interest and it’s been validation that traders are choosing TrueUSD, a stablecoin that they trust. It’s good that we are able to collect that data.
As for the future, we envision TrueUSD being adopted as the quote currency for the majority of the world’s crypto exchanges. That’s our long-term goal. (A quote currency is the second currency in a currency pair. For example, in a EUR/USD currency pair, the quote currency is the US dollar). Adding TrueUSD as a quote currency is a big deal because it’s saying that we see TrueUSD as a fundamental underlying currency as opposed to a token. And we’re well on our way towards that, because every new exchange that’s been launching over the past 3 or 4 months has been launching with TrueUSD as their default currency, and many of the older exchanges are making the change as well.
As for specific pairs, we will be expanding to about 5 additional tokens soon. And we’ll also be launching at another top exchange soon, where we’ll be listed against about 9 coins. That’s right around the corner.
Will TrueUSD be listed in Korean/Chinese Exchanges?
We are currently listed on Upbit, which is a Korean exchange. We are also listed on another exchange called BitNARU, which uses TrueUSD as their quote currency. BitNARU is a new South Korean exchange that just launched. We are currently closely working with Korean exchanges as well as with Korean banks, because we want to work with them on a tokenized form of the Korean Won – TrueWon is something we want to bring to the market. We’re working with the government there to make that a possibility.
We do plan to work with the Asian market and quite a few Chinese exchanges to list with TrueUSD. At least two Chinese exchanges will be adding TrueUSD as a quote currency by mid-July.
Do you have any plans to have a crypto-to-fiat exchange gateway?
We’re already thinking about it and many people are already thinking of TrueUSD that way, where TrueUSD is perhaps the safest gateway between fiat and crypto. Our largest customers are institutional funds who are looking to move around large amounts of fiat into crypto without the volatility, and then they can move it around and initiate trades without it being so risky. Right now, if you move $10 million into bitcoin, you could lose 20% of that value in a day. But if you move it to TrueUSD into Binance for trading, you can be sure that $20 million is still $20 million whenever you decide to start trading.
Our plan is to make it easier and easier so that the gateway becomes accessible to everybody.
What are the advantages of investing in a US dollar-backed stablecoin compared with a non-collateralized stablecoin, or a stablecoin that is backed by crypto?
They appeal to two completely different audiences. We’re creating a fiat-collateralized stablecoin which is useful to traders, CFO’s of companies – people that literally want to work with a dollar derivative, and therefore it’s important to them that’s it’s redeemable to the underlying US Dollar. It’s also useful in business applications and trading and things like that.
The difference between this and Basis, for example, is that they are creating an algorithmic stablecoin, which has no tie to any government. It’s almost as though they are creating their own virtual government, which is great for anyone that anyone wants something that is completely independent of any world government. People do want this, something that will exist outside of government purview. There’s plenty of people who believe that something like that should exist. This is a very different audience, CFO’s don’t want something like this on their balance sheet. It doesn’t make it a bad thing, it’s just for a very different audience.
MakerDAO is an example of a crypto-collateralized stablecoin. They’re an example of a very interesting concept which is that they hold a bundle of crypto assets, everything from let’s say Ethereum to – even actually TrueUSD too, believe it or not – and that bundle acts as collateral to a stablecoin to Dai, to stabilize the currency itself.
I think all of these stablecoins have their place in the ecosystem, and we’re very focused on real-world assets, so the currencies are real, we’re also very focused on commodities, like gold and silver. And in the long term, we’ll focus on other hard assets. But there’s pros and cons to all three, so we don’t actually see these as competitors as much as appealing to different audiences.
The reality is that on one hand we are very grateful that Tether proved that there was enormous demand for a US dollar-backed stable coin. Everyone was shocked at how they grew to be $2 billion. It’s really impressive. That being said, they lost consumer trust, and they still continue to make statements that are hard to believe. The most recent article they published said that no auditor company would agree to work a company like them, and to us that sounded wild given that we’re working with an accounting firm that is performing attestations already, and we do that every month. We’re also onboarding with two of the top accounting firms, and by the end of this year we’ll have two of the top four and three of the top 50 accounting firms in the world performing attestation on our accounts. We find this kind of contradictory.
We see our job as regaining trader’s trust, and that we’re building a company that is inherently meant to protect the token holders rather than simply our own interest. We built a system so that even we as a company can’t touch the funds. These funds are entirely for the benefit of the token holders, which is a complete 180 degrees from the Tether approach where it’s in the corporate account and they have access and they can move it around wherever they please. It’s a fundamentally different approach.
What is your vision of the future of stablecoins?
I think the future is really exciting because I think what’s going to happen initially is that you’ll kind of see the groundwork being laid, things like TrueUSD and TrueEuro and TrueYen. It will start with simple currencies, but then you’ll see that there are interesting ideas built on top on that so there’s companies that will take reserve, where they’re taking bundles of other currencies, and creating a stable currency that’s basically collateralized by a mixture of other world currencies. That’s an exciting future because it moves us towards a global monetary system. It will save people a lot of angst around inflation and deflation of just their currency.
Can you explain the substantial price increase/decrease in TrueUSD that is supposed to have a pegged USD value such as the one that happened in May 16 of 2018?
A lot of people were confused by what was happening there. What people need to understand is what makes TrueUSD stable is that each token is redeemable for one dollar, so that means you don’t have to trade it for it to be worth a dollar, you can just come to our website and use our app. You can just redeem it if you ever want your dollars and get your dollars wired back to your bank account.
What happens is when the market gets irrational, when it gets excited, like it did around the Binance launch, that means that somewhere in the world, for whatever reason, people were willing to pay $1.30 for something that we all know is worth a dollar.
It actually doesn’t have anything to do with the stability of the token. The token didn’t change, it was always worth a dollar. But it just meant that on that day there were millions of people who were really excited, and they were willing – for whatever reason – to pay more than a dollar for a dollar.
We watched that play out and we did our best. If you look at our tweets and our blog posts, we tried to educate the community to let them know: “Never pay more than a dollar for TrueUSD, because it’s worth exactly one dollar.”
So it continues to be our job to educate the broader public that you should never pay more than a dollar for a stablecoin like ours, because that’s how much it’s worth. It’s worth a dollar.
I think the biggest thing I’ve been feeling lately is I am so humbled. This is one of the most exciting periods of my career, and also in terms of how many people are buying the products we are creating. It’s a very humbling experience for us.
But we’re always looking for ways to be better.
So it’s a combination of thank you and come talk to us, come to our Telegram or Twitter and tell us how we can do better, we’re hopefully building things people will enjoy using and there’s a lot more to come.