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Cardano Overcomes Hurdles to Launch USDM, First Fiat-Backed Stablecoin on the Blockchain

Cardano’s blockchain ecosystem has leaped forward with introducing USDM, its first fiat-backed stablecoin. This landmark achievement heralds a new chapter for decentralized finance on the platform, offering a stable digital currency pegged to the US dollar.

The stablecoin market, currently valued at $146 billion, has been predominantly led by Tether (USDT) and Circle (USDC), but USDM introduced a fiat-backed alternative that promises stability and reliability for its users

Unlike other Cardano-based stablecoins that are algorithmic or synthetic, USDM which is developed by Mehen Finance, will provide a fiat-backed option, ensuring stability and reliability for users.

Mehen Finance suggested the need for a U.S. dollar-backed stablecoin on Cardano by releasing a white paper in November 2022.

This document then positioned USDM as a “much-needed service” for users on the platform.

However, their initial launch plans for 2023 were significantly disrupted. In an interview on March 14th’s X Spaces, Mehen co-founder Matthew Plomin revealed that the closure of key crypto-friendly banks like Silicon Valley Bank, Silvergate, and Signature Bank in March 2023 forced them to hit the pause button.

Despite these hurdles, Mehen Finance forged ahead, partnering with fintech firm Plaid to facilitate the minting and burning of US dollars for USDM.

Further details of the launch of the USDM stablecoin was also released on their X handle, where Mehen stated that institutional customers will immediately begin the onboarding process, which might take one-two days.

This means USDM will gradually arrive on-chain during the week of March 18.

The launch of USDM was met with optimism by several members of the Cardano community, including Jaromir Tesar, who described the launch as a “major milestone” for decentralized finance (DeFi) on Cardano.

However, USDM enters a crowded and competitive market for stablecoins. USDT and USDC have the largest market caps at $103.1 billion and $30.8 billion, respectively, while seven other stablecoins boast a market cap of over $500 million, according to CoinGecko.

Although USDM faces competition from other stablecoins, it has the advantage of being the first fiat-backed stablecoin on the Cardano blockchain.


Victor Chijoke

Passionate about blockchain, and the decentralized internet. A writer in the morning, goalie in the evening. The aim is to keep my readers informed about the ever-evolving world of web3 with a unique blend of expertise and storytelling.

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