The Cardano blockchain has welcomed its first fiat-backed stablecoin with the introduction of the USDM by Mehen Finance on March 17.

According to the project:

“USDM will slowly be arriving on-chain the week of the 18th.”

The launch of this stablecoin comes almost two years after the release of its white paper. Matthew Plomin, the project’s founding partner, explained that the stablecoin launch was delayed due to issues with US banks in 2023.

What is USDM

USDM allows holders to mint and redeem their assets through fiat US Dollars by leveraging the fintech firm Plaid. Plaid is a US-based financial services company operating in Canada, the UK, France, Spain, Ireland, and the Netherlands.

According to its website, Mehen is actively pursuing Money Transmitter licenses across various US states and territories, VASP licenses in relevant jurisdictions, and engages in partnerships in the UK and the EU.

USDM’s launch is crucial for Cardano as its ecosystem has encountered significant hurdles in establishing a presence in the stablecoin market. Cardano-based stablecoins like DJED and USDA have struggled with adoption and usage compared to counterparts on Ethereum and Tron blockchains.

Data from DeFillama shows that stablecoins on Ethereum and Tron dominate the market, holding nearly 90% market share.

Stablecoin market cap sees surge.

USDM’s launch arrives when the broader crypto industry is witnessing an uptrend in the stablecoin market.

According to CryptoSlate’s data, the sector’s total market capitalization has reached an impressive $146.1 billion, its highest point since October 2022. This marks a significant turnaround for an industry that encountered substantial challenges and increased regulatory scrutiny following the shocking collapse of the Terra algorithmic UST stablecoin.

Notably, Tether’s USDT remains the dominant player in the space, boasting over $100 billion in circulating assets, followed closely by Circle’s USDC with approximately $30 billion in circulation