Long Take: The Chaos underneath Prime Trust's failure and $3B of TrueUSD

Prime Trust literally lost the keys to client funds and is now in receivership

Gm Fintech Architects —

Today we are diving into the following topics:

• Summary: The world of stablecoins is under a microscope as questions of trust and reliability surface, especially around TrueUSD. Recently reaching a market cap of $3 billion, TrueUSD has encountered skepticism, much like its peers USDT, USDC, BUSD, UST, and DAI, which have faced internal and external challenges — problems range from poor mechanism design and bad risk assessment to lawsuits and organizational discord. The crux of these issues is the inherent counterparty risk and the trust required for a custodial system to work effectively in the world of digital assets. As an example, Prime Trust literally lost the keys to $85MM. This raises the need for a genuine on-chain crypto dollar, providing consumer protection without relying on a single custodial entity.

• Topics: Prime Trust, TrueUSD, stablecoins, CBDCs, trust, capital markets

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Long Take

Trust Me, I’ll be True

Have you ever passed by a random, beaten-down deli that claims to serve the best coffee in the world?

The coffee, it’s probably Okay — especially if you like some ground sludge filter in a foam cup. Which we do. But is it, literally, the best?

Here’s another example.

You probably have to be a pretty good dad to get this mug. Or maybe you are an expert at generating guilt. You do the things, you are a dad. But out of billions of people out there, are you the totally best one?

Which brings us to one particular stablecoin of note — TrueUSD.

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There’s something about saying the word “trust” and “truth” over and over again that rings the wrong bell. It’s like, who are you trying to convince? You have the best coffee? You are the best dad? You are the most true and trusted stablecoin in crypto?

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There is now $3 billion worth of the truest, trustiest stablecoin ever. Are you ready to trust?