Stablecoins are cryptocurrencies that are designed to maintain a stable value relative to a reference asset, such as a fiat currency or a commodity. They are often used as a medium of exchange, a store of value, or a unit of account in the crypto ecosystem. However, not all stablecoins are created equal. In this article, we will compare four popular stablecoins: Binance USD (BUSD), Tether (USDT), TrueUSD (TUSD) and FUSD.

Binance USD (BUSD)

Binance USD (BUSD) is a stablecoin issued by Binance, the world's largest cryptocurrency exchange by trading volume. It is backed 1:1 by U.S. dollars held in reserve by Paxos Trust Company, a regulated and audited custodian. BUSD is approved by the New York State Department of Financial Services (NYDFS) and has received a verified attestation report from Withum, an independent accounting firm. BUSD is built on the Ethereum and Binance Smart Chain networks, and can be used for trading, payments, DeFi, and other applications. BUSD has a market cap of over $13 billion and a daily trading volume of over $5 billion¹.

Tether (USDT)

Tether (USDT) is the oldest and most widely used stablecoin in the crypto market. It was launched in 2014 as Realcoin, and rebranded as Tether in 2015. It claims to be backed 1:1 by U.S. dollars and other assets in reserve, but its exact backing ratio and composition have been subject to controversy and scrutiny over the years. USDT is issued by Tether Limited, a company incorporated in the British Virgin Islands, and operates on multiple blockchains, including Bitcoin (Omni Layer), Ethereum, Tron, EOS, Algorand, Solana, and others. USDT has a market cap of over $69 billion and a daily trading volume of over $100 billion².

TrueUSD (TUSD)

TrueUSD (TUSD) is another stablecoin backed 1:1 by U.S. dollars held in escrow accounts by regulated trust companies. It was launched in 2018 by TrustToken, a platform that enables the tokenization of real-world assets. TUSD is built on the Ethereum network and follows the ERC-20 standard. It also has integrations with other blockchains, such as Avalanche, Binance Smart Chain, Polygon, Solana, and Tezos. TUSD undergoes regular attestations by Cohen & Company, an independent accounting firm, and publishes its reserve balances on its website. TUSD has a market cap of over $1 billion and a daily trading volume of over $200 million³.

FUSD

FUSD is a relatively new stablecoin that was launched in 2020 by Fusion Foundation, a non-profit organization that aims to create an interoperable and inclusive financial system. FUSD is backed 1:1 by U.S. dollars held in reserve by Prime Trust, a licensed trust company. FUSD is built on the Fusion network, which supports cross-chain and cross-asset transactions through its decentralized control rights management (DCRM) technology. FUSD can also be bridged to other blockchains, such as Ethereum and Binance Smart Chain. FUSD has a market cap of over $40 million and a daily trading volume of over $10 million.

Comparison

The following table summarizes some of the key features and differences among the four stablecoins:

| Feature | BUSD | USDT | TUSD | FUSD |

| --- | --- | --- | --- | --- |

| Backing asset | U.S. dollar | U.S. dollar and other assets | U.S. dollar | U.S. dollar |

| Reserve custodian | Paxos Trust Company | Tether Limited | Various trust companies | Prime Trust |

| Regulatory approval | NYDFS | None | None | None |

| Audit/attestation | Withum | Moore Cayman | Cohen & Company | None |

| Blockchain support | Ethereum, Binance Smart Chain | Multiple blockchains | Ethereum, multiple blockchains | Fusion, multiple blockchains |

| Market cap | $13 billion | $69 billion | $1 billion | $40 million |

| Trading volume | $5 billion | $100 billion | $200 million | $10 million |

Advantages and Disadvantages

Each stablecoin has its own advantages and disadvantages depending on the use case and preference of the user. Some of the common pros and cons are:

- Advantages

- Stablecoins provide stability and liquidity in the volatile crypto market.

- Stablecoins enable fast and cheap cross-border payments and remittances.

- Stablecoins facilitate access to decentralized finance (DeFi) applications and services.

- Stablecoins offer transparency and auditability of the reserves and transactions.

- Disadvantages

- Stablecoins face regulatory uncertainty and compliance challenges in different jurisdictions.

- Stablecoins may suffer from centralization and counterparty risk due to the reliance on third-party custodians and issuers.

- Stablecoins may experience technical issues or security breaches due to the complexity and diversity of the underlying blockchains and smart contracts.

- Stablecoins may lose their peg or parity due to market fluctuations or arbitrage opportunities.

Conclusion

Stablecoins are an important and growing segment of the crypto ecosystem. They offer various benefits and use cases for users, traders, and developers. However, they also come with certain risks and limitations that need to be considered and evaluated. BUSD, USDT, TUSD, and FUSD are four popular stablecoins that have different features, strengths, and weaknesses. Users should do their own research and due diligence before choosing or using any stablecoin.

Reference

(1) 0.9985 | TUSDUSDT | Binance Spot. https://www.binance.com/en/trade/TUSD_USDT.

(2) BUSD to USDT | Converter & Best Exchanges | Coin Insider. https://crypto.coininsider.com/convert/busd-to-usdt/.

(3) USDT vs. USDC vs. BUSD: How Are They Different? | Bybit Learn. https://learn.bybit.com/crypto/usdt-vs-usdc-vs-busd-differences/.