Some more clarity has been provided by the TrueUSD team. Following their postponed launch on Binance, a lot of questions were waiting to be answered. Insufficient liquidity forced the company to hold off on this change. To clarify a few things, the company confirms the demand might exceed supply during major exchange listings. An interesting scenario, albeit one that can’t be solved easily.

There is a good reason why Binance hasn’t listed TrueUSD a few days ago. Insufficient liquidity forced the company to come up with a different plan of action. It seems a lot of questions were raised because of this unusual decision. In order to remain transparent, the TrueUSD team clarified a few things in their most recent blog post.

Clarifying the TrueUSD Circulation Issue

First of all, the demand for TUSD may exceed the supply during these exchange listings. That is possible, although rather uncommon in the world of cryptocurrency. The project’s smart contract is incapable of issuing new TUSD tokens unless the third-party fiduciary’s escrow account receives more funding. That is how things are supposed to work in the financial world, after all.

Additionally, the early liquidity of TrueUSD is somewhat limited. More specifically, it requires bank wire transfers to increase the TUSD supply. This process can take several days, if not longer. For the escrow account, transfers can only be sent on weekdays. This difficult situation will remain in place until traders purchase more TrueUSD and sold it into the supply on exchanges.

While these hindering factors are annoying, it’s not the biggest problem either. TrueUSD prides itself on being transparent and accountable. For a stablecoin, keeping everything in balance is of the utmost importance these days. There is no reason for users to spend more than the normal value for TUSD either. After all, redeeming the token can only be done for an equivalent amount of US dollars.

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