Binance mints almost 50 million TUSD stablecoin; TRU token rises 200%

Binance has delivered on its recent promise to support the stablecoin ecosystem.

According to the tweet of whale alertOn February 16, Binance purchased approximately $50 million, a stablecoin that runs on the Ethereum blockchain.

The exchange issued about 50 million TUSD on February 16th.

After its issuance, the TRU token previously linked to TUSD (now unlinked, according to CoinDesk) has surged 200% in the past few hours despite its relatively small market cap.

With a market size of $971 million, TUSD ranks 54th among major cryptocurrencies. However, the move to mint TUSD can be seen as part of Binance’s renewed effort to support other stablecoins after the decline of BUSD.

Binance supported TUSD in the past

Interestingly, TUSD was one of the stablecoins that Binance introduced automatic conversion in September 2022 in exchange for BUSD. The exchange cited increased liquidity and capital efficiency for users as reasons for putting all assets into his BUSD account at that time.

The news follows a tumultuous week for stablecoins, especially with dynamics shifts following recent regulatory scrutiny by the U.S. Securities and Exchange Commission (SEC). After an SEC investigation into Paxos and a challenge to the issuance of Binance USD (BUSD), traders are flocking to top stablecoins USDC and USDT.

Types of Stablecoins CZ Mentioned at Recent AMAs

At the recent AMA on February 14th, CZ mentioned several types of stablecoins. A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to another asset such as a fiat currency, commodity, or cryptocurrency. There are several types of stablecoins, including:

• Fiat Collateral Stablecoins: These are backed by fiat currency reserves such as US dollars, euros and yen. The issuer holds an equivalent amount of the underlying asset to ensure that the value of the stablecoin remains pegged to fiat currency. Examples of fiat-collateralized stablecoins include USDT, USDC, and TUSD.
• Commodity-backed stablecoins: These are underpinned by reserves of commodities such as gold and oil. The value of a stablecoin is tied to the value of the underlying commodity. Examples of commodity-backed stablecoins include DGX, PAXG, and USDTB.
• Crypto-backed stablecoins: These are backed by reserves of other cryptocurrencies. The value of a stablecoin is tied to the value of the underlying cryptocurrency. Examples of crypto-collateralized stablecoins include DAI, BitUSD, and USDTT.
• Unsecured stablecoins: They are not backed by reserves and rely on algorithms to maintain a stable value. These stablecoins use mechanisms such as seigniorage equities, secured debt, and price feeds to maintain their value. Examples of uncollateralized stablecoins include Ampleforth and FRAX.