Mehen Finance has launched the US dollar-pegged stablecoin USDM on Cardano, albeit with significant delays.
#CardanoCommunity,$USDM IS HERE!
policyID — c48cbb3d5e57ed56e276bc45f99ab39abe94e6cd7ac39fb402da47ad
assetName — 0014df105553444d pic.twitter.com/gnkh4NikDS
— $USDM on Cardano (@MehenOfficial) March 17, 2024
The USDM mechanism allows the issuance and redemption of the asset through the dollar. This differs from the existing stablecoins on Cardano, Djed and iUSD, which are algorithmic and synthetic, respectively.
The Mehen Finance team published the stablecoin’s white paper in November 2022.
Project co-founder Matthew Plomin confirmed during an AMA session in X Spaces that the coin’s launch was initially planned for 2023. However, plans changed with the emergence of issues at regional US banks, such as the closures of Silicon Valley Bank, Silvergate, and Signature Bank about a year ago.
According to Plomin, Mehen’s remaining banking partner, Cross River, also severed ties, opting to collaborate with Circle, the issuer of the second-largest stablecoin by market capitalization, USDC.
As a result, to facilitate the issuance and redemption of USDM, the team turned to fintech startup Plaid. According to Mehen’s CTO, Steven Fisher, the partnership was established in August 2023.
#Mehen development update:
Added the ability to add your Bank through Plaid. I still need more work on the Bank management, but this is the key piece to it all.
Adding your bank will allow you to deposit USD to mint $USDM and allow you to burn USDM to receive USD.
This is… pic.twitter.com/cOvxYp3G06
— Steven Fisher | Mehen CTO (@mehen_cto) August 16, 2023
Plomin claims that over 2000 partners, including decentralized exchanges and lending protocols, are ready to integrate USDM. The coin will gradually enter the network starting March 18.
The stablecoin segment’s capitalization exceeds $149 billion. The market is dominated by Tether’s USDT ($103 billion) and USDC ($30 billion). However, neither leader supports the Cardano blockchain.
In March, Celo became the 16th network where USDT operates. Circle integrated it in January.