Stablecoin issuer TrustToken is bringing its proof of reserves system for TrueUSD (TUSD) collateralization levels on-chain. Adding Chainlink to an existing partnership with accounting firm Armanino makes it possible.

The transparency measure is meant to provide additional certainty for decentralized finance (DeFi) traders who often rely on asset-backed stablecoins – even without a clear understanding of whether the assets are fully backed.

Pulling from Armanino’s TrustExplorer API, the Chainlink integration makes the data available on-chain, which then lets app builders develop preventative measures against fractional reserve banking or other potential red flags.

One of the problems that lending protocol Compound has with listing stablecoins is ensuring that stablecoin issuers are actually capable of minting the coins and keeping them properly collateralized, said TrustToken CEO Rafael Cosman.

TUSD is the seventh-largest stablecoin by market capitalization, according to CoinGecko. In June the stablecoin was approved as a collateral asset for generating dai on the Maker lending protocol.

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TrustToken Taps Chainlink for On-Chain Proof of Reserves for TrueUSD Stablecoin

by Mario Herndon
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