Cardano developer Emurgo announced plans to issue a US dollar-pegged stablecoin, USDA, on the Cardano network in early 2023. Emurgo plans to introduce USDA by the end of Q1 2023.
Emurgo, Cardano’s official commercial arm, said in a statement that USDA will be the first regulated stablecoin on the blockchain backed by a fiat currency. It also revealed that USDA will be the first delivery from its Anzens product market line. Anzens, the Cardano developer’s financial services product, was created to bridge crypto and real-world finance.
Stablecoins are tokens backed by an asset, or a basket of assets, and pegged to fiat currency, such as the U.S. dollar. They serve as an entryway to the crypto market for traditional market participants and are extensively used within the ecosystem as instruments for trading, borrowing, and lending.
USDA is part of Emurgo’s Anzens product, a broader plan that would offer users several financial services and products functioning on Cardano-based assets. These plans include lending and borrowing services, crypto-based card payments, and bridges between traditional markets and decentralized applications (DApps).
This could help bolster Cardano’s decentralized finance (DeFi) ecosystem, which locks just over $53 million in value as of Friday, per DeFiLlama data. That’s an 82% slide since March highs of over $300 million.
USDA is expected to launch on the Anzens platform in Q1 2023 where users will be able to tokenize their USD into USDA via credit/debit cards, wire transfer, or conversion of Cardano’s native ADA token, Emurgo said.
Meantime, The Near Foundation, an organization behind the NEAR blockchain, urged last month the winding down of the USN stablecoin and announced a $40 million fund for a “USN Protection Programme.” The foundation is setting aside the funds, which it says is equal to the amount of a “collateral gap” associated with the undercollateralization of the USN project.