During the first quarter of 2023, Cardano’s ecosystem will launch its first fully fiat-backed, regulatory-compliant stablecoin. Known as USDA, the stablecoin promises to make Cardano’s centralized finance ecosystem healthier and more sustainable.
Regulatory-compliant Fiat-backed stablecoin from Cardano
USDA is scheduled to launch in 2023, according to Emurgo, the official commercial arm of the Cardano blockchain. With its first product in the “Anzens” suite, the company aims to bridge the gap between traditional finance (TradFi) and digital finance (DeFi). USDA will exclusively use the Anzens platform next year where users can convert USD to USDA through credit or debit cards, wire transfers, or the conversion of Cardano’s native ADA token. Also included are lending and borrowing services, crypto-based card payments, and bridges between traditional markets and decentralized applications (dApps).
The stablecoin’s banking partner will be an undisclosed US-based financial services firm, which will ensure regulatory compliance for the USDA. By backing real-world assets, the USDA will help to create strong and long-term price stability, which will eventually lead to more reliable financial services for Cardano.
The next step in achieving the community’s future is to introduce a fiat-backed, regulatory-compliant stablecoin, according to Emurgo’s Fintech Managing Director, Vineeth Bhuvanagiri.
U.S. Dollar Stability Is Leveraged By USDA
A stablecoin based on the Cardano blockchain will safeguard Web3 companies, protect consumers from crypto market volatility, and enable fast global transactions.
Other stablecoins, including USD Coin (USDC) and Tether (USDT), will also be converted by Emurgo soon. Cryptocurrencies such as Bitcoin (BTC), Ether (ETH), and others will eventually be swapped by the company.
The collapse of the algorithmic stablecoin TerraUSD in May demonstrated that a stablecoin backed by the US dollar will help to reduce the uncertainty surrounding algorithmic stablecoins. With Cardano’s recent positive development, it may also help boost ADA’s price to the much-coveted $1 price mark. ADA is currently trading at $0.3076, with a market capitalization of $10.6 billion.