Crypto bank Anchorage Digital expands its stablecoin offerings by acquiring stablecoin issuer Mountain Protocol

The acquisition, which is subject to customary closing conditions and regulatory approval, will integrate the Mountain Protocol team, tech stack and licensing framework into Anchorage's existing offerings

Crypto bank Anchorage Digital has expanded its stablecoin offerings with the acquisition of Mountain Protocol, a stablecoin issuer that says it will begin winding down its main stablecoin, Mountain USD (USDM).

The acquisition, which is subject to customary closing conditions and regulatory approval, will integrate the Mountain Protocol team, tech stack and licensing framework into Anchorage’s existing offerings, Anchorage said in a May 12 statement.

While terms of the deal weren’t disclosed, it reflects an accelerating number of acquisitions between crypto and TradFi firms in recent months.

Explaining the acquisition, Anchorage CEO Nathan McCauley said stablecoins are becoming the backbone of the crypto economy, while anticipating that “every business” will eventually use stablecoins as part of their operations.

“We are already seeing this in the emerging tokenization of U.S. equities, which will bring a whole new class of investors into crypto markets,” McCauley said.

Martin Carrica, CEO of Mountain Protocol, said its stablecoin experience and Anchorage’s crypto infrastructure will bring together the best of both worlds to meet the growing global demand for stablecoin services.

Anchorage is the only federally chartered digital asset bank in the U.S., while Mountain Protocol’s stablecoin services are regulated by the Bermuda Monetary Authority.

It comes around nine months after Anchorage introduced a stablecoin rewards program for institutions holding the PayPal USD (PYUSD) stablecoin.

Announced in August 2023, the program saw institutions rewarded with 1% APY for their PYUSD holdings, which was part of a broader partnership to make the stablecoin more accessible to institutions.

Institutions could also earn up to 3% APY for completing specific tasks, such as performing cross-border payments or liquidity provision.

Mountain Protocol’s USDM to wind down

As part of the acquisition, Mountain Protocol said it would begin an “orderly wind-down process” for USDM, which operates as a yield-bearing stablecoin.

The process will see minting of the stablecoin cease immediately, while USDM rewards will remain active for another 30 days. After that, the reward rate will be set to 0% APY.

The stablecoin issuer’s customers can redeem their USDM through its platform, while other USDM holders are encouraged to swap the stablecoin for other tokens on exchanges.

“We are grateful to the community for their support of USDM and look forward to continuing to serve them in this transition,” Carrica said.

Mountain Protocol’s Ethereum-based USDM is not to be confused with Mehen Finance’s USDM stablecoin, which runs on the Cardano network.

At the time of writing, Mehen Finance’s USDM has a market cap of around $36 million, compared to Mountain Protocol’s USDM, which is valued at less than $50 million, according to RWA.xyz.

RWA.xyz estimates there are around 10,820 USDM holders.