Anchorage Makes Power Play in Stablecoin Wars—Acquires Mountain Protocol, Shutters USDM

Crypto custody giant Anchorage just fired the latest shot in the stablecoin arms race—snapping up Mountain Protocol while quietly euthanizing its own USDM stablecoin project. The move signals a ruthless pivot toward regulatory-friendly yield plays as the sector scrambles for post-2024 relevance.

Behind the chessboard: Mountain’s treasury-backed USDM now becomes Anchorage’s weapon of choice, replacing their in-house stablecoin that never quite escaped beta purgatory. Another casualty in the great stablecoin consolidation—because apparently the world needed one more dollar-pegged token.

Watch for Anchorage to weaponize Mountain’s Bermuda license like a regulatory shield, even as traditional finance snickers about ’blockchain innovation’ meaning ’finding the most forgiving jurisdiction.’ The custody wars just got interesting—and the body count just got higher.

Mountain Protocol to sunset USDM

With the acquisition, Mountain Protocol has now disclosed plans to wind down its USDM stablecoin. The stablecoin issuer stated that the process will be smooth and transparent, starting with the end of the new USDMtoken minting on May 12.

However, all other features are expected to remain for a while. The USDM rewards will be available for 30 days, after which it drops to 0%, and users can start redeeming their USDM already.

According to the firm, primary customers can redeem their stablecoins through the Mountain Protocol Platform, while others simply swap USDM for other tokens through exchanges. The stablecoin only has a market cap of $35 million, according to Defillama, a significant decline from its peak of around $150 million.

Stablecoin sector continues to attract interest and investments

Meanwhile, the deal highlights the growing interest in stablecoins among investors globally, leading to acquisitions such as this in the space. With stablecoins offering a faster and more cost-effective way to transact, experts believe the industry has massive potential.

According to Citi, the stablecoin sector, which is worth over $240 billion presently and dominated by Tether USDT and Circle USDC, could be worth $3.7 trillion by 2030. The report added that stablecoin issuers could become the biggest holders of US Treasuries.

Given the potential, many firms ranging from crypto-native and fintech firms to traditional financial institutions are considering venturing into the space. A recent report from the Financial Times claims that asset manager Fidelity wants to launch its own stablecoin, which is already in the advanced testing stages.

The sector has also seen multiple deals recently, with Stripe acquiring stablecoin infrastructure firm Bridge for $1.1 billion at the start of the year and Circle recently buying tokenization startup Hashnote. Hashnote is the issuer of the $1.3 billion yield-bearing USDY token.

While deals continue to be made, the future of US stablecoin legislation is currently hazy, with the Stablecoin Bill in the Senate failing a procedural vote a few days ago.

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