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Introducing an Exciting New Cryptocurrency on the Cardano Network
Cardano has taken a significant leap forward by welcoming a new addition: a stablecoin fully backed by US dollar bank deposits, the first of its kind in the ecosystem.
USDM, as this new currency is named, is backed 1:1 by US dollars deposited in a US-based bank, according to the stablecoin's website.
This guarantee of backing in dollars aims to instill confidence in users looking to acquire or redeem USDM, as each USDM token directly represents a dollar in reserve.
USDM is available for both individuals and institutions. The USDM token can be freely used and transferred within the Cardano network like any other native token.
To mint and burn USDM themselves, users must undergo standard identity verification processes such as Know Your Customer (KYC) and Anti-Money Laundering (AML) checks.
Analysis firm Messari has noted that stablecoins on Cardano offer users a variety of options for transactions and participation in various decentralized financial (DeFi) protocols, and now this new asset further strengthens that thesis.
Competition in the stablecoin market is fierce, with giants like Tether (USDT) and USDC leading in terms of capitalization and use cases. The arrival of USDM on Cardano not only aims to compete in this space but also to offer a solid alternative backed by real dollars, providing more options and diversity to network users.
However, USDT and USDC are also available on Cardano, thanks to the Wanchain network, which connects Cardano with Bitcoin, Ethereum, TRON, and other networks.
In addition to USDM, other stablecoins such as iUSD and DJED are also part of the Cardano ecosystem. However, it is important to note that these stablecoins differ in their design and operation because they are algorithmic and synthetic.
In the case of iUSD, although it was designed to maintain its value at 1 dollar, it has been below the $1 mark for six months.
