Former Coinbase senior executive launches institutional crypto exchange TrueX

What’s new? True Markets has launched TrueX, a crypto exchange that raised $9 million in a seed round of funding from NGO Solana Foundation, stablecoin issuer Paxos and blockchain team Aptos, as well as investment firms RRE Ventures, Reciprocal Ventures, and Hack VC. TrueX was founded by Vishal Gupta and Patrick McCreary, a former senior executive and engineer at leading US crypto exchange Coinbase.

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What else is known? After the launch, TrueX intends to attract market makers and customers through a liquidity program. Initially, the platform has limited functionality and access: it will only offer spot trading of a few major crypto assets to institutional traders.

Unlike Coinbase, which acts as both a broker and custodian for trading, TrueX has engaged Paxos as a qualified custodian. In the future, TrueX will offer broader support for different types of stablecoins for settlement and collateral, while Coinbase has this system built around the USDC stablecoin it developed with issuer Circle.

Notably, Gupta previously not only headed Coinbase’s product department, but also oversaw the launch of USDC at Circle, and worked at investment bank Goldman Sachs. Under his watch, Coinbase became the first crypto exchange to focus on stablecoin. USDC and the dollar are treated as equivalents on it, simplifying order management when traders switch between cryptocurrency and fiat.

Stablecoins offer traders a cryptocurrency solution to preserve value in a less volatile asset than traditional cryptocurrencies like bitcoin or Ethereum.

For now, TrueX will operate similarly to Coinbase, using only the PYUSD stablecoin, issued by Paxos under the brand of payment giant PayPal, as the default settlement currency. This means that PYUSD will serve as the equivalent of dollars in the TrueX ecosystem.

However, TrueX will launch full trading functionality in the coming month and allow traders to switch between different stablecoins.

The likely reason for choosing PYUSD as the primary settlement currency was to separate itself from Coinbase, which uses USDC. That said, Gupta calls working at Coinbase the best job he has ever had.

“We live in a world where these are not single-winner games. You look at traditional finance, and if there’s a Goldman Sachs, there’s a Morgan Stanley,” Gupta noted.

While PYUSD, which launched last August, has not achieved the same success as USDC or the leading stablecoin USDT from issuer Tether, its association with PayPal and Paxos offers promising opportunities.

PYUSD is currently ranked seventh in the stablecoin rankings and 105th overall on the list of cryptocurrencies by market capitalization at $721,74 million.

Earlier, Coinbase CEO Brian Armstrong said that the exchange invested in about 40 startups founded by former employees. Among them, Coinbase invested in the dYdX exchange, NFT marketplaces Zora and Magic Eden, blockchain social network Farcaster, and the Moonwell protocol. “Joining Coinbase is one of the best ways to learn how to start a startup,” Armstrong noted.