Cardano, a leading player in the blockchain industry, has made a significant breakthrough by introducing its first fiat-backed stablecoin, USDM, in collaboration with Mehen Finance. This development marks a crucial moment in the rapidly expanding $146-billion stablecoin market.
Originally slated for release in early 2023, the launch of USDM faced obstacles due to complications with U.S. banking partners, including the closure of prominent banks like Silicon Valley Bank, Silvergate, and Signature Bank. The situation was further exacerbated when Mehen’s initial banking partner, Cross River, decided to collaborate with Circle, leading to additional delays.
In an engaging new CNF YouTube video, USDM is presented as a unique stablecoin among other Cardano-based stablecoins like DJED and iUSD. What sets USDM apart is its direct backing by the U.S. dollar, allowing users to seamlessly mint or redeem USDM using real dollars. This sets it apart from more complex algorithmic and synthetic-based stablecoins, positioning USDM as a more stable and dependable option for Cardano enthusiasts.
A recent tweet by CardanoCommunity on March 17 revealed that the Mehen Finance-originated stablecoin enables users to mint or redeem USDM using the U.S. dollar. This feature distinguishes USDM from other existing Cardano-based stablecoins, such as DJED and iUSD, which are based on algorithmic and synthetic models.
Mehen faced challenges on its journey to launching USDM. The white paper, released in November 2022, outlined the roadmap, but 2023 brought banking hurdles. After parting ways with Cross River, Mehen integrated services from fintech company Plaid in August 2023, ensuring smooth USD transactions for USDM.
In another supportive tweet by Cardano Yoda, the loyalty to USDM is emphasized, highlighting its status as the first USD-backed stablecoin in Cardano’s ecosystem and recognizing the efforts of the Mehen team.
Mehen is now expanding its reach to the UK and Europe, seeking the necessary licenses. Over 2,000 partners are planning to integrate USDM on their platforms. The management and issuance of USDM will be regulated through smart contracts and decentralized oracles, ensuring transparency and security. While USDM is entering a market dominated by giants like USDT and USDC, it holds a unique position within the Cardano network, as these major stablecoins are not compatible with Cardano’s blockchain. The Cardano community has enthusiastically embraced USDM, seeing it as a significant step forward for decentralized finance on the platform.
In related news, previous CNF posts have highlighted that Cardano (ADA) has been fluctuating between $0.5319 and $0.7966 over the past month, but has yet to surpass the $1.00 mark. The crypto community had anticipated the altcoin’s price to rise above this threshold based on recent bullish trends. As shown in the accompanying chart, ADA is currently priced at $0.689, experiencing a 5.57% increase in the last 24 hours.
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