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Cardano Ecosystem

Bitcoinpress

11/21/2022

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Cardano is going to launch its first own stablecoin called USDA

Emurgo, the development platform and commercial arm of Cardano (ADA), is on its way own website announced that it will be launching a new stablecoin called USDA. USDA would be the first fully fiat-backed, regulatory [...] The post Cardano...

Cardano is going to launch its first own stablecoin called USDA

Emurgo, the development platform and commercial arm of Cardano (ADA), is on its way own website announced that it will be launching a new stablecoin called USDA. USDA would be the first fully fiat-backed, regulatory stablecoin in the Cardano ecosystem. USDA will be backed by the US dollar.

What is a stablecoin?

A stablecoin is a cryptocurrency that is linked to the value of an underlying asset. Usually this is the US dollar, but they can also be linked to another fiat currency, such as Euro Coin (EUROC) is linked to the Euro. For every coin sold, the organization behind the stablecoin buys back a dollar, which they store in a normal bank account.

However, a stablecoin can also be linked to an underlying asset, such as a fiat currency, based on an algorithm. These coins have no collateral and are therefore also called non-collateralized called stablecoins.

However, in addition to fiat currency, a stablecoin can also be linked to precious metals, such as gold or silver. Examples of stablecoins linked to gold are: Pax Gold (PAXG) and Tether Gold (XAUT). There are even stablecoins pegged to the price of other cryptocurrencies such as bitcoin (BTC) or Ethereum (ETH).

USDA stablecoin

USDA is the first product to be brought to market with Anzens, Emurgo’s new product line that aims to close the gap between traditional finance (TradFi) and decentralized finance (DeFi) smaller. Emurgo plans to launch USDA on the Cardano network in the first quarter of 2023.

Emurgo Fintech Director, Vineeth Bhuvanagiri, said the following about the new stablecoin:

USDA is a native asset, freely convertible to Cardano and backed by the US currency. This stablecoin not only provides stability to investors transacting financially on the blockchain, but also paves the way forward for the Cardano ecosystem to address a problem we are uniquely placed to solve: banking the unbanked.”

In addition, Emurgo will enable the conversion of other stablecoins, such as USD Coin (USDC) and Tether (USDT) to USDA, with long-term plans to enable conversion and swaps of cryptocurrencies such as BTC and ETH.

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