Anchorage Digital acquires Mountain Protocol as USDM stablecoin ends

Anchorage Digital announced on Monday that it is acquiring Mountain Protocol as the USDM stablecoin begins its shutdown process.

Anchorage decided to move forward with the acquisition in alignment with Mountain’s decision to “commence the orderly winddown of USDM.”

Anchorage aims to strengthen its institutional stablecoin capabilities through the acquisition, CEO Nathan McCauley remarked, though the deal’s terms remain undisclosed.

“By acquiring Mountain Protocol, we are taking a significant step forward in supporting institutional stablecoin adoption and advancing a new era of safety, security, and regulatory compliance in the global digital asset ecosystem,” McCauley said in a statement.

The firm notably holds recognition as the first federally approved bank in the cryptocurrency sector.

Stablecoin regulation efforts in the U.S. have slowed after a failed vote in the Senate, but both legislative proposals still aim to give traditional banks a more central role in handling fiat-backed digital currencies.

“Stablecoins are becoming the backbone of the digital economy. With recent regulatory progress and new institutional use cases, our long-term vision is clear: every business will be a stablecoin business,” McCauley added.

The action aligns with a surge in stablecoin adoption and testing, which regulatory leniency has encouraged.

CEO Martin Carrica of Mountain Protocol emphasized that the partnership with Anchorage, which combines stablecoin know-how and crypto infrastructure, equips the merged entities to meet the increasing demand for stablecoin services globally.

On May 12, Mountain Protocol ceased minting its stablecoin but assured that USDM rewards would persist for another 30 days before the APY adjusts to 0%.

The stablecoin issuer gives its customers the option to redeem USDM through its platform, while other holders should trade their USDM for other tokens on exchange platforms.

Martin Carrica and Matias Caricato founded the startup, which has accumulated $12 million in funding. Anchorage will take on Mountain Protocol’s team, technology, and licensing system as part of its operations.

RWA.xyz reports that Mountain Protocol’s USDM reached a $155 million market cap by March 2024, following its successful launch in late 2023.

The market cap has experienced a significant decline and now stands below $50 million.