The USDA was initially considered to become one of the first USD-backed stablecoins that will be launched in the Cardano ecosystem. However, in 2023, the Anzens team notified the community of regulatory complications, and communication soon ceased. Many believed that the USDA project would never materialize. Meanwhile, Mehem’s USDM launched and became the first USD-backed stablecoin in the Cardano ecosystem. Now, the USDA project is making a comeback with a new, strong partner.
USDA Is Back with a Strong Partner
On July 8, EMURGO announced that the Anzens USDA stablecoin will be launched by Encryptus. EMURGO will continue to support the launch as a technology provider.
Encryptus, an institutional-grade platform, was founded in 2020 in Dubai, United Arab Emirates. The company facilitates seamless buying and selling of crypto assets, offering conversion to local currencies. Encryptus is compliance-centric, holding a European license, VASP status in Lithuania, and boasting the largest payout network spanning over 80 countries. Their industry-leading off-ramp services ensure regulatory compliance and user confidence, making them well-positioned to navigate regulatory hurdles for the USDA launch.
Users will be able to buy and sell USDA through the Anzens website after completing KYC verification. It will also be possible to trade USDA through partners. USDA will be redeemable 1:1 for USD, and users from over 80 countries can purchase USDA in various local currencies. As a native Cardano asset, USDA transactions will not require KYC and will be free from censorship or restrictions.
USDA is for DeFi Users as well as Institutions
USDA will be fully backed by USD at a 1:1 ratio and available in the Cardano DeFi ecosystem, as well as for corporations and high-volume traders. With Encryptus as a partner, USDA has strong potential for institutional adoption and cross-border payments. However, it must compete with established stablecoins like USDT and USDC.
DeFi users will benefit from the diversification and increased security brought by another USD-backed stablecoin. USDA, like USDM, leverages the advantages of being native to the Cardano ecosystem. Currently, USDT and USDC can only be used in Cardano in the form of bridged tokens. Many users lost money because of the hack of Nomad Bridge. Some users may be reluctant to use bridged tokens and will prefer native tokens as the risk of use is much lower.
The hack of Nomad Bridge occurred due to a bug in the Ethereum part of the smart contract written in Solidity. It is important to mention that Wanchain Bridge, which is used to bridge stablecoins USDC and USDT from other blockchains to Cardano, has a high uptime and a good track record.
Conclusion
Launch dates for USDA are not yet known, and given past challenges, it is prudent to avoid promising specific dates. However, it is anticipated that the launch could occur this year, as Encryptus is an experienced and capable partner. Official announcements will provide more clarity.
The return of the USDA project was hinted at by Sheldon Hunt, the current head of the Cardano ecosystem at EMURGO, who promised more stablecoins, more VC interaction, more incubation programs, more major partnerships, and more community governance. EMURGO, one of the three founding entities of Cardano, is becoming increasingly active. Alongside IOG, the Cardano Foundation, and Intersect MBO, another strong player is emerging in the Cardano ecosystem. We look forward to future announcements from EMURGO.