Cardano (ADA) to receive it’s first stablecoin “AgeUSD” once smart contracts are enabled on its blockchain. The stablecoin protocol was announced by EMURGO, the Ergo Foundation, and IOHK.
AgeUSD stablecoin to arrive on Cardano
According to what is known, the stablecoin protocol is based on the Ergo blockchain, which will also be available on Cardano, once the project finally unlocks its smart contract functionality.
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EMURGO, one of the partnering firms, is a multinational blockchain firm that is in charge of creating various solutions for Cardano. This was the firm that announced the stablecoin’s launch on January 24th, during the Ergo Summit 2021.
Unlike other stablecoins AgeUSD will not be pegged to any fiat currency. Other stablecoins, such as Tether (USDT), and USDC, are pegged to USD and backed by it.
AgeUSD, on the other hand, is a crypto-backed stablecoin, meaning that it does not rely on CDPs (Collateralized Debt Positions). As such, liquidation events for the stablecoin are impossible.
AgeUSD will demonstrate the Cardano chain’s new functionalities
It is also known that AgeUSD will use Ergo’s native coin in its protocol, and that it could, theoretically, be deployed to other chains, aside from Ergo and Cardano. However, due to the fact that both firms are rather closely connected to IOHK, Cardano was the obvious choice.
At the same time, the arrival of the stablecoin will allow IOHK to show off the new functionalities and capabilities of Cardano, following the release of its smart contracts. The joint project will also demonstrate the compatibility of Cardano’s smart contract programming language, Plutus, and ErgoScript.
No specific date has been released yet However, with Cardano’s next phase, Goguen, coming along soon, it appears it could be functional on Cardano by Q3 2021.