In a groundbreaking move for the Cardano blockchain, the US dollar-backed stablecoin "USDM" makes its debut, offering a stable and secure method for digital transactions.
With a design ensuring a 1:1 value ratio with the USD and plans for expanded global accessibility, USDM paves the way for enhanced DeFi integration and financial inclusivity on the blockchain.
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The US Dollar-Backed Stablecoin "USDM" on Cardano
It has been revealed that the first US dollar-backed stablecoin tied to legal tender, "USDM," has been released on the Cardano (ADA) blockchain.
What is the Stablecoin "USDM"?
USDM is a legal tender-backed US dollar-linked stablecoin developed by the financial services company "Mehen," which has acquired money transmission licenses in various states of the USA.
The design of USDM ensures that the price of 1USDM remains stable at one dollar.
A distinctive feature of this stablecoin is that an amount of US dollars equivalent to the value of USDM is reserved to back its value. The official site explains that "all USDM tokens are backed by US dollars at a 1:1 ratio in banks based in the USA."
The launch of USDM came about two years after the publication of its whitepaper. The delay in the launch is reported to have been due to "issues with banks in the USA."
How to Use USDM
Users residing in the target regions can acquire USDM by connecting their Cardano wallet to the "Mehen dApp" and completing the identity verification (KYC).
This allows them to link their bank account and obtain USDM, and also convert USDM back to US dollars to receive in their bank account. When converting back to US dollars, the corresponding USDM is destroyed.
The acquired USDM can be used for payments and transactions on the Cardano blockchain. It is expected that the number of services supporting USDM will increase, making it usable for various services like Decentralized Finance (DeFi) and Decentralized Exchanges (DEX).
Regions Where USDM is Available
As of the writing of this article, the use of USDM is limited to "17 approved states in the USA." However, Mehen is working on acquiring licenses in various regions, including the UK and the EU, with the expectation that USDM will be usable in more places in the future.
Additionally, Cardano has issued "Djed," an algorithmic stablecoin with an over-collateralized structure.
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