MetaMask launches new stablecoin: Potential rival for USDT and USDC?

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MetaMask launches new stablecoin

From wallet to issuer

Founded by ConsenSys in 2016, MetaMask quickly became the main entry point into the Ethereum and DeFi ecosystem, with its fox logo popping up every time users hit “Connect Wallet” — a true icon of the crypto industry.

Although some criticized the wallet for high fees, a clunky interface, and reliance on ConsenSys and Infura infrastructure, MetaMask still generated hundreds of millions of dollars annually through swap and staking fees. That’s why creating its own stablecoin — mUSD — was the company’s next logical step.

“MetaMask has always aimed to give users control,” explained ConsenSys founder Joseph Lubin. “Now we want to offer a dollar built right into the wallet that millions already use.”

According to the project, mUSD will be backed by cash, U.S. Treasury bonds, and other highly liquid assets. Unlike Tether, whose reputation has suffered from opacity, MetaMask promises daily on-chain reserve reports.

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mUSD is issued via Stripe’s Bridge platform using M0’s decentralized infrastructure. The stablecoin is fully backed 1:1 with liquid U.S. dollar equivalents — cash and short-term Treasuries.

Why MetaMask wants this

The idea of launching mUSD did not come out of nowhere. Today, stablecoins are the beating heart of the crypto economy. Trillions of dollars flow annually through Tether’s USDT and Circle’s USDC.

They serve as the primary entry and exit ramp for global liquidity, the base currency for most trading pairs, and are increasingly used for remittances and payments.

Here, MetaMask holds a key advantage — distribution. The wallet is the primary interface for Ethereum and other EVM-compatible chains. Millions of users already rely on it daily to store, send, and swap tokens. Introducing mUSD allows MetaMask to:

- Lock users deeper into its ecosystem — instead of relying on USDT or USDC, transactions can occur directly in MetaMask’s native currency.

- Reduce dependence — every DeFi protocol needing a “stable” reference currently depends on third-party coins. With mUSD, MetaMask controls this critical layer.

- Monetize reserves — stablecoins generate revenue from reserve assets (cash, Treasuries, etc.), a model that has turned Circle and Tether into multi-billion-dollar corporations.

Where’s the risk?

MetaMask is counting on its main advantage — its massive user base. Users will be able to acquire, hold, and spend mUSD directly in the app without external services.

“This is vertical integration,” said Clara Medalie, Head of Research at Kaiko. “MetaMask controls the interface for millions of people. If it also controls the dollar underneath, it locks the whole ecosystem into itself.”

But risks loom large. A stablecoin issued by a wallet that already dominates Web3 could draw scrutiny from regulators. Meanwhile, the market is already dominated by giants USDT and USDC, while newcomers like PayPal’s PYUSD are trying to grab share. To succeed, MetaMask must win over both everyday users and businesses.

Another open question is governance. Who will control the reserves? Will mUSD holders earn yield on deposits, or will all revenue flow to ConsenSys? Transparency is critical. After years of scandals around Tether, the trust bar in the stablecoin market has risen sharply — every new issuer must prove reliability twice over.

What’s next?

If MaskUSD gains traction, the balance of power in DeFi could shift. Protocols may start building liquidity around it, dApps could adopt it by default, and millions of users would get a “plug-and-play” dollar.

But history shows failures too: PayPal USD, despite the brand power, never became mainstream. That’s why MetaMask must convince the crypto community that its stablecoin is not just “another dollar,” but a convenient and reliable instrument. Its success will depend on transparency and whether interacting with DeFi truly becomes easier.

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