Mehen Finance, the entity behind Cardano's latest stablecoin USDM, is gearing up for a public "retail launch" of its fiat-backed stablecoin, slated for as early as the upcoming month.
While USDM was officially introduced on Cardano on March 17, its accessibility is currently limited to institutional users. Matthew Plomin, one of Mehen Finance's founding partners.
Describing the ongoing phase as a "live mainnet ecosystem early launch," Plomin explained that eligible institutions can now participate in the platform and begin minting stablecoins. He highlighted a pivotal feature of the USDM model designed to prevent over-minting, which involves direct reporting of reserves to Charli3, a decentralized oracle tailored for the Cardano network, integrated into the token's smart contract.
This mechanism ensures transparent real-time transmissions, as independently reported oracle values dictate the quantity of USDM tokens that can be minted, effectively eliminating the risk of over-minting. Last July, Mehen had also asserted that unlike certain other stablecoins such as Circle's USD coin and Tether, USDM would not be subject to freezing.
While Caleb Montiel, the founder of Cardano content platform Cardano Curation, lauds this feature as a strength, cryptocurrency commentator Vanessa Harris cautions that the inability to freeze on-chain USDM could potentially pose challenges, as regulators might opt to freeze USDM bank accounts, thus impacting its peg to the USD.
Plomin further disclosed that USDM reserves are maintained in government-specific money market mutual funds at Fidelity and Occidental Asset Management, underscoring that these are distinct from traditional banks. Currently, early institutional users can exchange USD via wire transfer for USDM at a 1:1 ratio.
With licensing approvals secured in 17 U.S. states and more in the pipeline, Mehen plans to pursue money transfer and virtual asset service provider licenses in Europe and the UK later in the year. Additionally, Plomin revealed the company's upcoming foray into equity financing through crowdfunding, opting for this route over a traditional token sale. The financing endeavor will be facilitated through the crowdfunding platform ChainRaise, with a commitment to tokenizing Series A shares on Cardano.
