Mehen Finance, the brains behind Cardano’s latest stablecoin USDM, is gearing up for a public “retail rollout” of its fiat-backed stablecoin as early as next month. USDM made its official debut on the Cardano network on March 17, initially catering to institutional users. However, Mehen Finance’s Founding Partner Matthew Plomin has indicated that the stablecoin’s availability will soon extend to retail users in April.
“We are in a limited launch phase – internally calling it ‘Live main-net ecosystem early rollout’,” stated Plomin, highlighting that institutions in eligible jurisdictions can now access the platform and commence minting the stablecoin. The USDM model aligns with other fiat-backed stablecoins but incorporates a distinctive feature to prevent excessive minting.
Notably, USDM’s reserve status is directly reported to Charli3, a decentralized oracle tailored for the Cardano network. The integration of Charli3 oracle data into the token’s smart contract ensures transparent real-time transfers, as emphasized by Plomin. Last July, Mehen had announced that USDM would not be freezable, distinguishing it from other stablecoins like Circle’s USD Coin (USDC) and Tether (USDT).
Caleb Montiel, the founder of Cardano content platform Cardano Curation, contends that this feature makes USDM a superior stablecoin. However, crypto commentator Vanessa Harris warns of potential drawbacks, suggesting that the inability to freeze USDM on-chain could prompt regulators to freeze USDM-linked bank accounts, potentially affecting the stablecoin’s peg.
Mehen Finance, headquartered in New York, operates within a regulatory landscape where the state’s financial services regulator has a track record of scrutinizing and taking action against major industry players. Plomin disclosed that the USDM reserve is held in government-only money market mutual funds at Fidelity and Western Asset Management, clarifying that these funds are not used as banks.
Early institutional users are currently utilizing wire transfers to convert United States dollars into USDM at a 1:1 ratio. Mehen has secured licensing approvals from 17 U.S. states, with plans for more approvals in the pipeline. Additionally, the company intends to pursue money transmitter and virtual asset service provider licenses in Europe and the United Kingdom later this year.
