USDA would be the first fully fiat-backed, regulatory-compliant stablecoin in Cardano ecosystem
Emurgo, a founding member of the Cardano blockchain and its official commercial arm, intends to introduce USDA, a stablecoin pegged to the US dollar, in the first quarter of 2023.
Cardano-Based Regulated Stablecoin USDA Will Hit the Market in Early 2023
Emurgo Fintech Managing Director Vineeth Bhuvanagiri said: “The introduction of a fully fiat-backed, regulatory-compliant stablecoin is the next step in realizing the future for our community.”
So, this is the first stablecoin in the Cardano ecosystem to be fully fiat-backed and compliant with the regulations is USDA.
Stablecoins are digital currencies backed by one or more assets linked to fiat money like the dollar. They give traditional market participants access to the cryptocurrency market and are widely used throughout the ecosystem as trading, borrowing, and lending tools.
The USDA product is a component of Emurgo’s Anzens program, a larger scheme providing customers with a range of financial services and products based on Cardano-based assets. These proposals include card payments using cryptocurrency, lending and borrowing services, and links between conventional markets and dApps.
This would strengthen Cardano’s Defi ecosystem, which, according to DeFiLlama data, locks a little over $53 million in value as of Friday. Since March, a high of almost $300 million is an 82% decline.
Using credit/debit cards, wire transfers, or the conversion of ADA, customers can tokenize their USD into USDA when USDA launches on the Anzens platform in Q1 2023.
To ensure USDA is fully compliant and follows regulatory rules, Emurgo said it has worked with a licensed financial services organization with headquarters in the United States as the banking partner. With a long-term goal of enabling conversion and swaps of cryptocurrencies like bitcoin, ether, and other cryptocurrencies, Emurgo will soon enable the tokenization of USD along with the conversion of other stablecoins, such as USD Coin (USDC) and Tether (USDT), to USDA.
The action was taken after Emurgo announced this month that it would invest $200 million in the Cardano ecosystem over the next few months to boost network participation. This announcement was made on the sidelines of Singapore’s Token2049 conference.
ADA/USD 4-hour chart | Source: TradingView
However, this news was not enough to make ADA price go up. At the time of writing, ADA is changing hands at $0.33.
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