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In its design of the USDA stablecoin, Emurgo has integrated avenues for easy adoption of the soon-to-be-launched token.
Emurgo, the official commercial arm and a founding entity of the Cardano blockchain, is planning to launch the first stablecoin on the protocol by the end of the first quarter (Q1) of 2023. Dubbed the USDA token, Emurgo revealed in a statement that the stablecoin will be built on the Anzens platform, representing one of the product suites that the company hopes to bolster the overall adoption of Cardano-backed assets.
Stablecoins are tokens that are built to maintain parity with a real-life asset, usually the United States Dollar. Based on their status as the de facto fiat currency in the crypto ecosystem, regulators are very much interested in how stablecoins operate across the board. Many watchdogs are exploring new regulations to bring complete oversight to the aspect of blockchain innovation since the collapse of the Terra Labs linked stablecoin, TerraUSD (UST).
For Emurgo, the company said the USDA is designed as a fully regulatory-compliant stablecoin.
“The introduction of a fully fiat-backed, regulatory-compliant stablecoin is the next step in realizing the future for our community,” wrote Emurgo Fintech Managing Director Vineeth Bhuvanagiri.
The firm said it is bringing compliance to the token based on its collaboration with a financial services startup in the United States. The firm refused to name the US-based partner but confirmed it will be helping to help navigate all regulatory statutes.
With Emurgo also exploring lending and borrowing services, the startup will position the USDA stablecoin as the center of its product offering.
The firm also believes the USDA stablecoin will attract additional liquidity to the broader Cardano ecosystem which has seen a remarkable plunge in the Total Value Locked (TVL). The firm’s TVL has plunged by more than 80% since the end of the first quarter this year from $300 million to $50 million according to data from DeFiLlama.
Emurgo to Lower Accessibility for its USDA Stablecoin
In its design of the USDA stablecoin, Emurgo has integrated avenues for easy adoption of the soon-to-be-launched token. The firm said users can easily earn the token by purchasing it with credit or debit cards. Additionally, the firm said it will create options for users to convert their Cardano into the asset.
In the long term, Bitcoin (BTC), Ethereum (ETH), and other assets will also be convertible to the USDA stablecoin. As a boost to the purchase options, wire transfers will also be enabled for users who prefer that payment model.
Cardano is one of the dominant blockchain protocols but has fared relatively lower when it comes to the emergence of fully functional and well-used decentralized applications (DApp) across the board. While the rival Ethereum network has thousands of Dapps with a high number of associated stablecoins, the push from Emurgo to debut the USDA token can serve as the transition point for more innovative apps to be launched.