The Cardano blockchain has received its first USDM stablecoin, which is backed by the US dollar at a 1:1 ratio, similar to the Tether USDT stablecoin.
The USDM stablecoin (issued by Mehen Finance) appeared on March 17th. This information is confirmed on the official X page of the company.
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Owners of USDM will be able to mint or buy the stablecoin for American dollars. This makes USDM fundamentally different from other synthetic stablecoins on the Cardano network, such as DJED and iUSD.
The company's plans to issue a dollar-linked stablecoin were announced in November 2022. At the time, it was reported that the goal was to provide Cardano users with "this sought-after service." Mehen Finance CEO Matthew Plomin commented on this important step: "The road to launching a Cardano-based stablecoin has not been easy due to the challenges in the US banking system in 2023."
Mehen Finance attempted to launch USDM in 2023, but the collapse of several banks, including Silicon Valley Bank, Silvergate, and Signature Bank, thwarted those plans.
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As a result of the banking crisis, Cross River, which Mehen Finance partnered with, merged with stablecoin issuer Circle. The company noted, "After that, the cooperation with Cross River ceased." Mehen Finance then decided to use the services of financial services company Plaid to issue USDM and burn them to generate US dollars.
The fintech company Plaid handles payment transfers between various major US banks, including Bank of America, Chase, and Wells Fargo, and provides support for cryptocurrencies.
Stephen Fisher, CTO of Mehen, said that the company began working with Plaid in August 2023 and integrated their services.
Stephen Fisher explained the benefits of the partnership, "The ability to add your bank through Plaid is open. That's the key to all of this. By adding your bank, you can deposit USDM to mint USDM and burn USDM to receive fiat USD."
Mehen Finance is now seeking a fiat and cryptocurrency asset transfer provider license in the UK and Europe, which will allow the company to significantly expand its services.
USDM has attracted interest from a number of companies that have expressed a desire to integrate stablecoin into their platforms. These include both lending platforms and decentralized exchanges. Mehen Finance said that companies need one or two days to complete the adaptation process.
"So USDM will come online gradually on the 18th," Mehen added.
USDM is entering the crowded stablecoin market, where USDT and USDC are the leaders. Transparency and security will be achieved by regulating USDM issuance through smart contracts and decentralized oracles.
USDT has the largest market capitalization at $103.1 billion, and USDC has $30.8 billion. However, USDM is protected from competition from them because they are not currently available for transfer via the Cardano blockchain.
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