Anchorage Digital Acquires Mountain Protocol, USDM Stablecoin to Wind Down
In a significant move within the crypto space, Anchorage Digital, a federally chartered digital asset bank, has announced the acquisition of Mountain Protocol, a prominent stablecoin issuer. This strategic acquisition will see Mountain Protocol’s flagship stablecoin, Mountain USD (USDM), gradually phased out.
The acquisition, pending customary closing conditions and regulatory approvals, will seamlessly integrate Mountain Protocol’s experienced team, cutting-edge technology, and robust licensing framework into Anchorage Digital’s existing infrastructure. This strategic move, as stated in Anchorage Digital’s official May 12th announcement, is expected to accelerate the institutional adoption of stablecoins.
While the financial specifics of the deal remain undisclosed, this acquisition underscores the rising trend of mergers and acquisitions between traditional finance (TradFi) firms and cryptocurrency companies. This trend reflects the increasing convergence between the traditional and digital finance worlds.
Anchorage Digital CEO, Nathan McCauley, emphasized the growing importance of stablecoins as the backbone of the crypto economy, envisioning a future where stablecoins become an integral part of every business operation.
Mountain Protocol CEO, Martin Carrica, highlighted the synergistic potential of this merger, combining Mountain Protocol’s expertise in stablecoin management with Anchorage Digital’s robust crypto infrastructure to meet the growing global demand for stablecoin services.
This acquisition brings together Anchorage Digital, the sole federally chartered digital asset bank in the U.S., and Mountain Protocol, whose stablecoin operations are regulated by the Bermuda Monetary Authority, creating a powerful force in the stablecoin market.
The news comes approximately nine months after Anchorage Digital launched its institutional stablecoin rewards program for holders of PayPal USD (PYUSD).
USDM Stablecoin to Wind Down
As part of the acquisition agreement, Mountain Protocol will initiate an orderly wind-down process for its USDM stablecoin, a yield-bearing stablecoin operating on the Ethereum blockchain. Minting of USDM ceased on May 12th, 2024, with USDM rewards remaining active for an additional 30 days before being set to 0% APY.
USDM holders can redeem their tokens through Mountain Protocol’s platform, while holders on exchanges are encouraged to swap their USDM for alternative tokens. This phased approach ensures a smooth transition for all USDM holders.
It’s crucial to note that Mountain Protocol’s USDM is distinct from Mehen Finance’s USDM stablecoin, which operates on the Cardano network. Mountain Protocol’s USDM experienced significant growth after its launch in late 2023, reaching a market cap of $155 million by March 2024, according to RWA.xyz, before declining to below $50 million. RWA.xyz estimates approximately 10,820 USDM holders.