True crypto enthusiasts are holding the crypto market down during the crypto winter. These entities encircle Cardano. In the first quarter of 2023, Emurgo, a founding member of the Cardano blockchain and its official commercial arm, will launch USDA, a regulated stablecoin pegged to the United States Dollar.
USDA will be the first stablecoin in the Cardano ecosystem to meet all regulatory requirements and be backed by fiat currency. Stablecoins are digital currencies backed by one or more assets and pegged to fiat currencies such as the United States dollar. They allow traditional market players access to the bitcoin industry. Moreover, they are commonly used as trading, borrowing, and lending mechanisms across the ecosystem.
USDA set to hit the market in early 2023
Vineeth Bhuvanagiri, managing director of Emurgo Fintech, stated in an interview that the launch of a fully fiat-backed, regulated stablecoin (USDA) is the next step in reaching the community’s potential. USDA is incorporated into the Anzens product by Emurgo.
The broader proposal would provide customers with a variety of financial services and solutions based on Cardano assets. These proposals consist of lending and borrowing services, crypto-based card payments, and bridges between conventional markets and decentralized applications (dApps).
The introduction of a fully fiat-backed, regulatory-compliant stablecoin is the next step in realizing the future for our community.
Vineeth Bhuvanagiri, Emurgo’s Fintech Managing Director
The launch of USDA could contribute to the growth of Cardano’s decentralized finance (DeFi) ecosystem. According to figures from DeFiLlama, the Cardano ecosystem is worth a little over $53 million as of Friday. This is a decline of 82% from March’s highs of over $300 million.
The USDA plans to go live on the Anzens network in the first quarter of 2023, per Emurgo. After the stablecoin’s introduction, customers will be able to tokenize their USD through credit/debit cards, wire transfers, or the exchange of ADA.
Emurgo has teamed with a regulated financial services organization situated in the United States to issue USDA. This partnership ensures that the stablecoin is fully compliant and adheres to regulatory norms, according to Emurgo.
Emurgo will soon enable the conversion of other stablecoins, such as USD Coin (USDC) and tether (USDT), to USDA alongside the tokenization of USD. In addition, Emurgo has long-term intentions to facilitate the conversion and swapping of cryptocurrencies like bitcoin, ether, and others.
This move comes months after Emurgo’s decision to invest around $200 million in the Cardano ecosystem in the coming months in an effort to expand network membership.
Cardano’s upcoming Summit and the FTX aftermath effects
Cardano is one of the most renowned blockchain protocols, but it has fared poorly in terms of the emergence of fully functional and widely used decentralized apps (DApp) across the board. While the competitor Ethereum network includes hundreds of Dapps with a large number of stablecoins, Emurgo’s push to establish the USDA token can act as a transition point for the creation of more innovative apps.
Similar to its contemporaries, Cardano has experienced a significant decline over the past two weeks. At the time of publication, the asset traded for $0.3305. The value of the asset declined 8.33 percent throughout the week. However, the asset had gained 1.90 percent the previous day.
The asset reached a low of $0.3159 last week. The current price of Cardano is 89 percent below its all-time high of $3.10.
Cardano Summit is the largest annual conference for the Cardano community, hosted by Cardano Foundation with assistance from EMURGO and IOG. Cardano Summit 2022 will be held from November 19-21, 2022, in Lausanne, Switzerland, with virtual attendance possible for individuals unable to attend.
Notable speakers from Cardano’s founding entities (including Charles Hoskinson), ecosystem partners, and selected Cardano community members will talk on a wide range of related topics, including Cardano DeFi, NFTs, Cardano Web3, investing, the Cardano metaverse, and gaming, among others.
Since the collapse of Terra’s UST, stablecoins remain a tainted investment. Recently, on-chain statistics published by CryptoQuant’s CEO Ki Young Ju indicated that FTX’s stablecoin reserve has fallen to its lowest level in a year. Perhaps the launch of USDA will restore the crypto community’s faith in Stablecoins. However, a miracle and numbers are required for it to come to life.