USDA, a stablecoin based on Cardano, is expected to hit the market in early 2023

Key points: 

• USDA will be the first fully fiat-backed, regulatory-compliant stablecoin in the Cardano ecosystem.
• Besides stablecoin, this initiative includes lending and loan servicing, crypto-based card payments, and a bridge between traditional markets and dApps.
• With USDA scheduled to launch on the Anzens platform in the first quarter of 2023, users will be able to tokenize their dollars to USDA via credit/debit card, bank transfer, or convert ADA.

Emurgo, the official trading arm and founding company of the Cardano blockchain, has announced plans to launch the U.S.-pegged stablecoin USDA in early 2023.

USDA will be the first fully fiat-backed, regulatory-compliant stablecoin in the Cardano ecosystem.

“Launching a fully fiat-backed, regulatory-compliant stablecoin is the next step in enabling the future of our community,” wrote Vineeth Bhuvanagiri, managing director of Emurgo Fintech.

Stablecoins are tokens backed by an asset or basket of assets and pegged to a fiat currency such as the U.S. dollar. They serve as an entry point for traditional market participants to enter the crypto market and are widely used in the ecosystem as trading, lending, and lending tools.

USDA is part of Emurgo’s Anzens offering, a broader initiative that will offer users a variety of financial services and products for Cardano-based assets. These initiatives include lending and loan servicing, crypto-based card payments, and a bridge between traditional markets and decentralized applications (dApps).

That could help boost Cardano’s decentralized finance (DeFi) ecosystem, which is worth just over $53 million, according to data from DeFiLlama on Friday. That's down 82% from its March high of more than $300 million.

With USDA scheduled to launch on the Anzens platform in the first quarter of 2023, users will be able to tokenize their dollars to USDA via credit/debit card, bank transfer, or convert ADA, Emurgo said.

Emurgo has partnered with a U.S.-based regulated financial services firm to issue the USDA as a banking partner and ensure the stablecoin is fully compliant and meets regulatory guidelines, Emurgo said, without naming the firm.

In addition to USD tokenization, Emurgo will soon allow the conversion of other stablecoins such as USD Coin (USDC) and Tether (USDT) to USDA and has long-term plans to enable the conversion and exchange of cryptocurrencies such as Bitcoin and Ethereum.