Anchorage Digital acquires Mountain Protocol as stablecoin issuer sunsets USDM

Crypto financial services firm Anchorage Digital is expanding into the stablecoin trade with its acquisition of Mountain Protocol, according to an announcement on Monday. The move coincides with Mountain’s decision to “commence the orderly winddown of USDM.”

Anchorage CEO Nathan McCauley noted that the acquisition will enable the firm to provide institutional-grade stablecoin services. The terms of the deal were not disclosed. 

“By acquiring Mountain Protocol, we are taking a significant step forward in supporting institutional stablecoin adoption and advancing a new era of safety, security, and regulatory compliance in the global digital asset ecosystem,” McCauley said in a statement.

Notably, Anchorage operates the first federally chartered crypto bank. While stablecoin regulation in the U.S. appears to be temporarily stalled following a failed cloture vote last week, the general push of the two bills under congressional consideration would give the banking industry a larger role in managing fiat-backed digital assets. 

“Stablecoins are becoming the backbone of the digital economy. With recent regulatory progress and new institutional use cases, our long-term vision is clear: every business will be a stablecoin business,” McCauley added.

The move comes as stablecoin experimentation and adoption accelerate, in part due to a more permissive regulatory regime. 

Mountain, launched in 2023, offers an Ethereum-based, yield-bearing token pegged to the U.S. dollar called USDM. The stablecoin, which uses a “rebasing” mechanism and is backed in full by short-term U.S. Treasurys held in bankruptcy-remote accounts, offers about 5% in annual percentage returns through daily rewards.

The startup, founded by Martin Carrica and Matias Caricato, has raised $12 million in total funding. Anchorage will absorb the Mountain Protocol team, technology, and licensing framework into its operations. 

According to a post on X, Mountain is will sunset USDM, which has seen its supply shrink from a high of $150 million to around $50 million, according to rwa.xzy.