Crypto

Cardano announces the launch of a solid stablecoin

Updated November 19, 2022 00:54 AM.

A USDA-regulated stablecoin based on Cardano will hit the market in early 2023. USDA will be the first fully fiat-backed, regulatory-compliant stablecoin in the Cardano ecosystem, said Emurgo, the official trading arm and founder of the Cardano blockchain.

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Cardano to launch USDA-hedged stablecoin in early 2023

In the first quarter of 2023, Emurgo, one of the founders of the Cardano blockchain and its official trading arm, will launch USDA, a regulated stablecoin pegged to the US dollar.

Stablecoins are tokens backed by an asset or a basket of assets and pegged to a fiat currency such as the US dollar.

They serve as a gateway to the cryptocurrency market for traditional market participants and are widely used in the ecosystem as tools for trading, borrowing and lending.

USDA will be the first stablecoin in the Cardano ecosystem to meet all regulatory requirements and be backed by a fiat currency.

Vinith Bhuvanagiri, Managing Director of Emurgo Fintech, said in an interview that the launch of a regulated and fully backed by fiat (USDA) stablecoin is the next step towards unlocking the full potential of the community.

The USDA will be integrated into the Anzens product by Emurgo. The broader offering will provide customers with a variety of financial services and solutions based on Cardano assets.

These offerings include lending and borrowing services, cryptocurrency card payments, and bridges between traditional marketplaces and decentralized applications (dApps).

Towards a regulated and more secure stablecoin

The USDA launch could help the growth of Cardano’s decentralized finance (DeFi) ecosystem. According to official sources, the Cardano ecosystem has evolved and reached a very significant valuation, which allows it to easily launch such projects.

However, this overall score has dropped over 80% from the most recent peaks. Emurgo has partnered with a regulated financial services organization based in the United States to issue ADA.

This partnership ensures that the stablecoin is fully compliant with regulatory standards, according to Emurgo.

Emurgo will soon allow the conversion of other stablecoins such as USD Coin (USDC) and Tether (USDT) to USDA, along with the tokenization of the US dollar.

In addition, Emurgo has long-term intentions to facilitate the conversion and exchange of cryptocurrencies such as Bitcoin, Ethereum and others.

This initiative comes a few months after Emurgo decided to invest around $200 million in the Cardano ecosystem over the next few months with the goal of increasing the network’s membership.

As such, USDA will become the first fully fiat-backed (1 USDA per USD 1 in reserve) and regulatory compliant stablecoin in the Cardano ecosystem.

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