- Two stablecoins, USDA and Djed are set to launch on Cardano in early 2023.
- USDA fiat-based will Djed is over-collateralized and based on an algorithm.
- Emurgo says that both stablecoins will greatly benefit the Cardano network.
Emurgo, the founding entity of Cardano, claims that the scheduled native stablecoin USDA under development will bring stability to the network, among other underlying benefits. USDA is one of the two proposed stablecoins for the Cardano network, expected to launch in the early months of 2023. USDA is a fiat-backed stablecoin that will be available for Cardano users for various transactions.
Apart from USDA, Cardano has a second upcoming stablecoin called Djed. It is an over-collateralized stablecoin that is algorithm-based. Djed is being developed by the DeFi service provider, COTI.
In a blog post, Emurgo explained that the USDA, like several other fiat-backed stablecoins, will peg against the U.S. dollar. Hence, every USDA purchase requires depositing an equivalent amount of U.S. dollars into a designated bank account to back it.
According to Emurgo, the USDA will introduce much-needed stability to the Cardano network. It will remove the limitations caused by the volatility associated with the current native token of the network, ADA. Emurgo explained that the volatility of ADA, as seen with other regular cryptos, injects fear into investors and developers, making them overly cautious in their dealings on the network.
Emurgo further explained that community members developing products that work for everyone will benefit from the USDA stablecoin. It will also address other needs within the community and the overall crypto ecosystem.
Other areas noted by Emurgo, where USDA and Djed will benefit the Cardano community, include inviting new integrations. The company revealed that traditional retailers, dApps, DEXs, company treasuries, DeFi enthusiasts, and other user categories would become attracted to Cardano when the stablecoins become active.
Emurgo also emphasized the safety of assets for users who may want to patronize Cardano-based DeFi tools. It stated that such funds will remain secure even in the face of liquidation unless the U.S. government faces a significant collapse.
The company pointed out other benefits, raising the expectation of users who expect to see the stablecoins launch soon, as promised by the network.