The layer 1 blockchain Cardano has welcomed its first 1:1 fully fiat-backed stablecoin, USDM, the latest entrant into a stablecoins of US$146 billion dominated by Tether
Launched on March 17, the stablecoin founded by Mehen Finance allows holders to hold or redeem USDM through the US dollar and differs from existing Cardano-based stablecoins such as DJED and iUSD, which are algorithmic and synthetic.
The firm published its white paper in November 2022, explaining that a US dollar-backed stablecoin would provide a “much needed service” to Cardano users.
The road to USDM launch
Mehen planned to launch USDM in 2023, but “everything changed” when Silicon Valley Bank, Silvergate and Signature Bank closed in March 2023Plomin said in a March 14 X Spaces.
Plomin revealed that the bank he was working with, Cross River, cut ties with Mehen around the time the bank partnered with Circle, the second-largest stablecoin firm, which was looking for a new banking partner at the time.
Mehen now uses the services of lfintech company Plaid to mint and burn US dollars for USDM.
Plaid provides a payment transfer network between Bank of America, Chase, Wells Fargo and other major US banks to promote financial technology and cryptocurrency products.
“TOadding your bank will allow you to deposit USD to mint USDM and will allow you to burn USDM to receive USD“Fisher said.
Stablecoins and a competitive market
USDM enters a crowded and competitive market for stablecoins.
USDT and USDC They have the largest market capitalizations with US$103.1 billion and US$30. 800 million, respectively, while seven other stablecoins have a market capitalization of more than $500 million, according to CoinGecko.
However, USDM is protected from competition from those stablecoinsat least on the Cardano network, as they cannot currently be transferred across the Cardano blockchain.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
