USDA: A STABLECOIN THAT CLAIMS TO WANT TO PLAY IT SAFE
The irreversible collapse of the dollar that the TerraUSD (USDT) suffered in May 2022 has severely shaken confidence in stablecoins. Especially in algorithmic stablecoins. But even more traditional stablecoins, based on dollar and dollar equivalent reserves – such as Tether’s USDT – still inspire fears.
USDA, a dollar stablecoin project based on the Cardano network, claims to want to address these concerns. It’s a proposal from Emurgo, Cardano’s trading arm. As reported by CoinDesk among others, USDA would like to be exemplary.
This ADA blockchain stablecoin thus promises to be “fully backed” by a pool of fiat currencies equivalent to issued USDAs. And it claims to want to be in compliance with regulatory frameworks.
A DEVELOPMENT OF THE DEFI ON THE CARDANO NETWORK?
The USDA stablecoin is part of a plan to develop DeFi (decentralized finance) on the network initiated by Charles Hoskinson. It must be said that Cardano is lagging behind the DeFi present on its main rival, the Ethereum network (ETH).
To issue this stablecoin, Emurgo would have partnered with a regulated financial services company based in the United States. Unfortunately, however, it has not been named at this time. This regulated company would be the “banking partner” that would issue USDAs. This is in order to “comply with US regulatory guidelines.
The USDA stablecoin is expected to be launched in the first quarter of 2023, via the Anzens platform. The latter will allow users to tokenize their U.S. dollars for 1-for-1 USDAs, via their credit/debit cards, bank transfers or ADA token conversion, according to Emurgo.
Given the extremely troubled times the cryptosphere is currently going through, Emurgo seems to have a good understanding of what investors in the sector are looking for. It remains to be seen whether the promises made will be kept. And most importantly, if transparency and proof of reserve will be in place.