#Cardano #stablecoin #USDA #willADAGoUP
The Cardano ecosystem will feature the first fiat-currency-backed stablecoin, to be called USDA, as announced by blockchain founder Emurgo.
The coin is scheduled to launch by 2023, and it will be a currency pegged to the US dollar and will meet all regulatory standards.
The introduction of the stable coin is intended to help grow the Cardano ecosystem, which has suffered significant losses since March this year, losing 82%. Cardano is currently worth around $53 million, while it recorded over $300 million in early spring.
At the time of writing, Cardano is trading at $0.325, having been in a sideways trend since early November.
Source:TradingView
What is Stablecoin?
Stablecoin is a fixed-rate cryptocurrency. This cryptocurrency is suitable for storing capital, trading and diversifying an investor’s portfolio from fluctuations in the cryptocurrency market.
Stablecoin can have different assets to provide value, such as fiat currency or a basket of assets.
Stablecoins are present on almost all platforms because they are a convenient means of storage and mutual settlement between investors.
Cardano’s Anzens platform and plans for the future.
The company has developed an enhanced plan to support Cardano called Anzens, which will include various financial services and products. For example, services for investor settlement:lending and borrowing, bridges between decentralized applications and markets, and cryptocurrency card payments.
In early 2023, the Anzens platform will be launched and investors will be able to convert US dollars into USDA using traditional tools to do so.
Emurgo’s banking partner issuing and regulating the currency will be a US company, whose name remains unknown.
Following the USD, the company plans to open up the possibility for investors to convert other cryptocurrencies to USDA: firstly USD Coin (USDC) and Tether (USDT), and then bitcoin, ether and others in the long term. Let’s see how this can be affect and if will ADA go up.
The weak point of stable coins.
At the same time, an investor should not forget about the weak point of stable coins. They are centralized, and if the regulator has difficulties, it will affect every stablecoin holder. For example, in 2019, a lawsuit was initiated where the defendant was the Bitfinex exchange, which was accused of illegally using $850 million belonging to its associated Tether. The exchange did not reimburse Tether for these funds until 2021, at the same time New York state authorities sued Tether, also accusing it of illegal use of funds.
Under the terms of the agreement with the State Attorney’s Office, Bitfinex and Tether have agreed to pay $18.5 million to the state, information about their holdings will be made public, and services to local investors will be terminated. In the meantime, neither company has admitted to wrongdoing.
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