Cardano (ADA) finally gets fiat-backed stablecoin USDM after huge delays
Mehen Finance planned to launch USDM in early 2023, however, delays occurred as crypto-friendly institutions closed in 2023 and its banking partner joined Circle.
Cardano, a layer-1 blockchain, has welcomed its first 1-to-1 completely fiat-backed stablecoin, USDM, the latest entrant into the $146 billion stablecoin market led by Tether (USDT) and Circle (USDC). Launched on March 17, the Mehen Finance-founded stablecoin allows holders to mint or redeem USDM using the US dollar, distinguishing it from other Cardano-based stablecoins such as DJED and iUSD, which are algorithmic and synthetic in nature.
Matthew Plomin, Mehen’s founding partner, stated that the road to launching the stablecoin on Cardano was not smooth, with delays caused by complications with US banks in 2023. In November 2022, the company produced a white paper describing how a US dollar-backed stablecoin will provide a “much-needed service” to Cardano users. Mehen had planned to launch USDM in 2023, but “everything changed” when Silicon Valley Bank, Silvergate, and Signature Bank closed in March 2023, Plomin said in a March 14 X Spaces. Plomin said that the bank it was working with, Cross River, terminated relations with Mehen about the time it partnered with Circle, the second-largest stablecoin firm, which was searching for a new banking partner.
“Once they had them, they didn’t care about us anymore,” Plomin claimed. “[It was a] kick in the nuts delay.” Mehen now leverages the services of fintech firm Plaid to create and burn US dollars for USDM. Plaid operates a payment transfer network between Bank of America, Chase, Wells Fargo, and other major US banks to support fintech and cryptocurrency applications. According to an X post by Mehen’s chief technology officer, Steven Fisher, the company will incorporate Plaid’s services in August 2023. “Adding your bank will allow you to deposit USD to mint $USDM and allow you to burn USDM to receive USD,” Fisher went on to explain.
Mehen is actively seeking a license to operate as a money transmitter and virtual asset service provider in the United Kingdom and Europe.
Meanwhile, Plomlin announced that over 2,000 partners intend to integrate USDM into their platforms, which range from lending and borrowing protocols to decentralized exchanges, while Mehen stated that institutions will complete the onboarding process in 1-2 days. “This means USDM will slowly be arriving on-chain the week of the 18th,” according to the statement. To enhance transparency and security, Mehen’s website states that USDM will be issued and managed via smart contracts and decentralized oracles. Mehen had planned to launch USDM in 2023, but “everything changed” when Silicon Valley Bank, Silvergate, and Signature Bank closed in March 2023, Plomin said in a March 14 X Spaces. Plomin said that the bank it was working with, Cross River, terminated relations with Mehen about the time it partnered with Circle, the second-largest stablecoin firm, which was searching for a new banking partner. “Once they had them, they didn’t care about us anymore,” Plomin claimed. “[It was a] kick in the nuts delay.” Mehen now leverages the services of fintech firm Plaid to create and burn US dollars for USDM.
“Adding your bank will allow you to deposit USD to mint $USDM and allow you to burn USDM to receive USD,” Fisher went on to explain. Mehen is actively seeking a license to operate as a money transmitter and virtual asset service provider in the United Kingdom and Europe.
Meanwhile, Plomlin stated that over 2,000 partners intend to incorporate USDM into their platforms, which range from lending and borrowing protocols to decentralized exchanges, while Mehen stated that institutions will need 1-2 days to finish the onboarding process. “This means USDM will slowly be arriving on-chain the week of the 18th,” according to the statement. To enhance transparency and security, Mehen’s website states that USDM will be issued and managed via smart contracts and decentralized oracles. Several Cardano community members, like Jaromir Tesar, expressed confidence about USDM’s introduction, describing it as a “major milestone” for decentralized money in Cardano.USDM enters a crowded, competitive stablecoin market.
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