Aiming to increase competition in the cryptocurrency market, the Cardano blockchain is not left behind in welcoming its newest member: the USDM stablecoin, fully backed by fiat currency. This launch marks an inflection point for the Cardano network, which until then had seen stablecoins such as USDT and USDC dominate the market, valued at an impressive $146 billion.
USDM, an initiative by Mehen Finance, opened a new phase on March 17, offering a stablecoin option that allows users to mint or redeem coins directly through the US dollar. This new feature distinguishes itself from pre-existing alternatives on the network, such as DJED and iUSD, which are based on algorithms and synthetic in nature, respectively.
#CardanoCommunity,$USDM IS HERE!
policyID – c48cbb3d5e57ed56e276bc45f99ab39abe94e6cd7ac39fb402da47ad
assetName – 0014df105553444d pic.twitter.com/gnkh4NikDS
— $USDM on Cardano (@MehenOfficial) March 17, 2024
Matthew Plomin, founding partner at Mehen, shared the challenges faced on the road to launching USDM. The journey was tumultuous, especially due to complications with banking institutions in the US the previous year. Mehen had planned to launch in 2023, but encountered significant obstacles following the closure of key banks such as Silicon Valley Bank and Silvergate.
In a conversation on X Spaces, Plomin detailed how Cross River Bank, initially a partner of Mehen, withdrew its support after allying with Circle, a major player in the stablecoins market. “After they had them, they no longer cared about us”, lamented Plomin, highlighting the difficulties encountered.
However, Mehen adapted, collaborating with Plaid, a fintech that facilitates payment transfers between US banking giants. This partnership, completed in August 2023, is essential for the functionality of minting and burning US dollars in USDM.
Additionally, Mehen is seeking licenses to expand its services in Europe and the UK, signaling a promising future for USDM. Plomin revealed that several companies are already planning to integrate the stablecoin into their platforms, proof of USDM's adoption potential.
USDM promises to bring an additional layer of security and transparency to the Cardano ecosystem, thanks to governance through smart contracts and decentralized oracles. The enthusiasm of the Cardano community is palpable, with figures like Jaromir Tesar celebrating the launch as an “important milestone” for decentralized finance on the network.
Amid a competitive market, USDM stands out for its unique approach, setting the stage for broader and more diverse integration into crypto. USDM's debut not only expands stablecoin options for Cardano users but also reinforces Cardano's position blockchain on the global cryptocurrency scene.
