USDA and Djed


In recent years, stablecoins have increasingly come under the scrutiny of regulators. The main concerns are the principles of operation of algorithmic stablecoins, as well as the transparency of reserves and the adequacy of the provision of centralized stablecoins.

Especially often the problems were discussed after the collapse of one of the largest algorithmic stablecoins – TerraUSD (UST), which caused the fall of the entire cryptocurrency market. As a result, there was a temporary decoupling of rates and many other stablecoins.

But the issue of reserves remains the main subject of discussion of their reliability. And the problem here is that most of the reserves of centralized stablecoins are a complex mixture of commercial paper, secured loans, corporate bonds, precious metals and other assets. And most often, companies are criticized for the lack of proper audit to confirm reserves. In addition, these issuers are not properly regulated, which increases the risks for investors.

Cardano is currently working on the release of two new stablecoins, which are tasked with solving key problems inherent in most stablecoins.

The Cardano development team plans to release the first fully regulated stablecoin in 2023, USDA, backed by fiat and pegged to the US dollar. As well as an over-collateralized algorithmic stablecoin issued by the COTI platform called Djed.

The principle of operation of centralized and algorithmic stablecoins is different, and in this article we will briefly describe the features of each of them.


On November 18, 2022 in Singapore, Emurgo announces the launch of a new stablecoin on the Cardano blockchain — USDA. This stablecoin will be fully regulated, backed by the US dollar and pegged 1 to 1.

Emurgo is one of the co-founders of the Cardano project. Its mission is to develop and support businesses and help integrate businesses into the Cardano ecosystem.

One of the global goals of Cardano is to provide access to banking products to every person in the world. And the company has been developing its products quite successfully for a long time in the markets of Africa and Asia, where residents have no access to banking services, and the country’s national currency is depreciating too quickly to act as a store of value.

To achieve this goal, the Cardano developers are introducing a set of products “Anzens” designed to connect traditional financial services to cryptocurrency. Well, USDA will be the first product to help bridge the gap between TradFi (traditional finance) and DeFi (decentralized finance).

“The Cardano ecosystem was built on the idea of ​​bringing real-life applications to crypto and laying the foundation for building the economy of the future. The introduction of a 100% fiat backed and regulatory compliant stablecoin is the next step in realizing the future for our community. Not only does this stablecoin provide stability for investors conducting financial transactions on the blockchain, but it also propels the Cardano ecosystem forward towards a challenge we can already solve: banking for the poor.”says Vineet Bhuvanagiri, Managing Director of Emurgo.

USDA is scheduled to launch in the first quarter of 2023 on the Anzens platform, where users will be able to tokenize their US dollars into USDA via credit cards, wire transfers, direct deposits or payments, and through native ADA token conversion. Then they will work on creating a safe and convenient conversion of other stablecoins to USDA (for example, USDC and USDT), as well as cryptocurrencies such as Bitcoin, Ethereum and others.

To fully comply with regulatory requirements and ensure compliance with oversight rules, Emurgo has partnered with an as-yet-unnamed U.S. regulated financial company to act as a banking partner and be responsible for issuing USDA tokens and holding deposits.

By relying on regulation and provision of real assets, the USDA can guarantee reliable, long-term price stability, leading to the opening of more global financial services to the Cardano ecosystem.


Unlike fiat-backed stablecoins, algorithmic stablecoins are regulated by a specific set of algorithms that manage the balance between supply and demand, thus ensuring exchange rate stability.

Djed is an algorithmic, overcollateralized stablecoin backed by the Cardano (ADA) token and SHEN.

Algorithmic stablecoins, which are backed by a single currency, have a number of vulnerabilities. To solve this problem, Djed has a reserve asset – the SHEN token.

The concept of “overcollateralization” means that a stablecoin is backed by excess collateral in the form of a cryptocurrency held in reserve. And, if ADA falls sharply, the underlying smart contracts will include a reserve SHEN token that will balance price fluctuations, helping to keep the overcollateral level between 400% and 800%.

This stablecoin has been developed for more than two years in partnership with the COTI platform and IOG (on the site you can find a document that describes all the technological features and operation of the stablecoin – here)

COTI is a first-level blockchain payment network that provides a throughput of up to 100,000 transactions per second, thanks to the Proof-of-Trust consensus mechanism. COTI provides the infrastructure needed to create and issue stablecoins that are highly secure and scalable, and have low transaction fees.

Input Output Global is an engineering and technology company engaged in cryptocurrency development and research activities.

On January 31, 2023, after completing a series of audits and stress tests, the developers of the COTI blockchain platform, in collaboration with Input Output, announced that Djed had successfully launched on the Cardano mainnet.

During the November Cardano Summit, COTI CEO Shahaf Bar-Geffen stated:

“Recent market events have shown once again that we need a safe haven from volatility and Djed will serve as that safe haven on the Cardano network. We need not only a stable, but also a decentralized coin with proven reserves in the network.”.


The main mission of Cardano is to bring blockchain technologies into real life and provide access to them to anyone in the world. This is a lot of work from a technological point of view, but the Cardano team is making good progress in this direction.

Providing economic identification is a key component in countries where people do not have an identity card and access to the banking sector. For example, in developing countries in Africa and Asia, the provision of digital services and decentralized identity will give people access to education, access to banking services and the employment market. And Cardano is already addressing some of these issues by developing projects like Atala Scan, Atala Trace, and Atala Prism.

Cardano-powered stablecoins that share these values ​​will help bring stability to the wider ecosystem and restore trust by acting as a trusted channel between TradFi and DeFi. Which, in turn, can bring cryptocurrencies closer to their original goals – the availability of digital finance for every person and independence from centralized issuers.

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