Cardano has introduced its first 1:1 fully fiat-backed stablecoin, USDM. This new entrant aims to secure a foothold in the highly competitive $146 billion stablecoin market, predominantly led by giants Tether and Circle.
The launch marks a pivotal moment for Cardano, especially following its delays and challenges in delivering its much-anticipated Layer 2 solution, Hydra.
Cardano New Stablecoin Despite Hydra Delay
Mehen Finance, the architect behind USDM, originally planned for an early 2023 launch. However, the roadmap encountered significant setbacks following the unexpected closure of crypto-friendly banks. This turmoil in the banking sector and the loss of its banking partner, Cross River to Circle, introduced unforeseen delays in USDM’s deployment.
Matthew Plomin, Mehen’s founding partner, openly discussed the arduous journey. He highlighted the pivotal moments that reshaped their strategy. Notably, Plomin talked about the banking crisis and the shift to Plaid for minting and burning US dollars for USDM.
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The stablecoin’s introduction provides a fresh alternative to Cardano users. Based on algorithmic and synthetic models, it distinguishes itself from other Cardano-based stablecoins, such as DJED and iUSD. It represents a major milestone for decentralized finance (DeFi) on the blockchain. Enthusiasts like Jaromir Tesar acknowledge its potential to elevate the ecosystem.
“Cardano has the first USD-backed stablecoin Mehen USDM. This is a major milestone for DeFi on Cardano,” Tesar said.
This strategic move by Cardano to embrace USDM amidst its ongoing development of Hydra reflects a resilient and adaptable approach. Charles Hoskinson, co-founder of Cardano, refuted rumors about abandoning Hydra, emphasizing the community’s commitment to advancing the blockchain’s scalability and efficiency.
“I’m seeing some videos claiming that Hydra has been abandoned. It is just pure FUD. The team has never been more productive and motivated, there is great community engagement and new papers on the way for enhancements to the protocol,” Hoskinson explained.
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This clarification reassures stakeholders about Cardano’s roadmap toward achieving a more scalable, secure, decentralized financial ecosystem.
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