Thread by @0xsurferboy

1/20 EMURGO's $USDA could be Cardano's very FIRST live stablecoin.

And how the XRP Lawsuit could affect Cardano and $USDA. 👇👇

A New Year Deep Dive🧵

2/20
EMURGO is the commercial arm of Cardano formed in 2017

EMURGO builds partnerships and business ventures with organizations globally to educate people about Cardano and support dApp development.

Overall, the goal of EMURGO is to promote the growth and widespread adoption

3/20
EMURGO recently introduced $USDA, the first USD-backed stablecoin for the Cardano ecosystem in Nov 2022.

It is backed by cash & govt. debt.

4/20
$USDA is scheduled to be launched in Q1 2023

As a 1:1 fiat-backed stablecoin, EMURGO has partnered with a regulated fin. institution based in the US to custody cash deposits, assuring the stablecoin is fully compliant and adheres to regulatory guidelines.

5/20
$USDA's safety depends entirely on the issuer (EMURGO) being honest with its reserves, making it more of a centralized stablecoin.

$USDA will be the first product from EMURGO’s “Anzens” suite of products designed to "bridge TradFi and DeFi".

6/20
The Anzens platform supports the development and adoption of $USDA. It also lets users buy, sell, and trade USDA stablecoins, and other cryptoassets.

The platform also intends to support other dApps and services, like lending, borrowing, and asset management.

7/20
Users will be able to tokenize their USD into USDA via credit cards, Wire Transfer, ACH, or ADA conversions

EMURGO will soon enable the conversion of other stablecoins (USDC/USDT) to USDA, with further plans to enable conversion and swaps of cryptos like BTC or ETH

8/20
Why is $USDA such a big deal.... or is it?

9/20
Ethereum has DAI, Binance has BUSD, but Cardano has... well, no stablecoins.

There used to be 3 Cardano stables under development:
Ardana's $dUSD, COTI's $DJED and EMURGO's $USDA

After Ardana's flop, users are now banking on $DJED and $USDA to be the first Cardano stables

10/20
However, the Cardano community seems to be more optimistic about the $DJED algo-stable compared to the more centralized $USDA

DJED's safety relies on how well the reserve pool smart contract is written.

11/20
But unlike algo-stables, 1:1 USD-backed stables like $USDA are unlikely to be impacted by price movements in $ADA if the SEC comes after them.

Nonetheless,

The Cardano community is optimistic by the fact that, like DAI, $DJED is overcollateralized. (DJED up to 8x)

12/20
Recently, there has been escalations in the Ripple v SEC lawsuit.

If Ripple loses, it would have significant impacts to crypto markets and might even shift the SEC's focus onto Cardano according to Charles Hoskinson.

13/20
(quick dive into XRP case)

Prior to XRP's supposed ruling, LBRY was caught up in SEC lawsuits.

The SEC won and $LBC dropped almost 50%.

Under the SEC vs LBRY standard, almost every cryptocurrency, including Ether and Dogecoin, are securities (potentially XRP & ADA)

14/20
For more in-depth details on the lawsuit: cointelegraph.com/cryptocurrency…

TLDR;
- The SEC determined XRP fulfilled the Howey test
- XRP was used to raise $1.3B+ from retail investors

15/20
The SEC v Ripple lawsuit is a very high profile case with many conspiracy theories:

e.g.
- ETH controlling the SEC, bribing them to go after Ripple.
- SEC head's law firm receiving $1.6M from Ethereum's EEA.

16/20
What happens if XRP loses?

A non-FUD take:

1. Ripple CEO said they would relocate to a regulation-friendlier environment if it loses. The following jurisdictions could be XRP's next home.

In addition, tax havens (Cyprus, Cayman, Bahamas) are also potential options

17/20
2. SEC could potentially go after Cardano for being a security and see a similar ~50% decline like what XRP experienced in 2020 when the lawsuit was filed.

This could be followed up with the delisting of coins from major exchanges like what Coinbase did to XRP in 2020.

18/20
3. According to @saylor, all PoS crypto are securities, and in Hoskinson's words, if the SEC considers ADA a security, the same could be said for ETH.

19/20
Historically, no stablecoin was considered a security through the Howey test.

If the SEC goes after ADA, $USDA might not come under their scrutiny (my opinion).

The XRP case could even boost investor/retail confidence in stablecoin projects through tighter regulations

20/20
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