Mountain Protocol, backed by Coinbase Ventures, launches $USDM stablecoin: "a regulated product that pays the 'risk-free rate'"

Mountain Protocol is a Bermuda‑regulated stablecoin issuer that launched USDM, a tokenized U.S. dollar stablecoin designed to pass through short‑term U.S. Treasury yield (the so‑called “risk‑free rate”) directly to holders. According to the project, USDM is a permissionless ERC‑20 stablecoin fully backed by segregated, bankruptcy‑remote reserves invested exclusively in short‑term U.S. Treasuries, with the yield distributed via a daily rebase that increases users’ token balances rather than changing the token’s price. USDM is redeemable at $1 per token for eligible institutional “primary users” who onboard with Mountain Protocol, while secondary trading and holding is open to anyone on supported blockchains. Mountain Protocol positions USDM as a regulated, yield‑bearing alternative to traditional fiat‑backed stablecoins like USDC or USDP, arguing that stablecoin holders should capture the Treasury yield generated by the assets backing their tokens rather than leaving it to the issuer. The company is regulated by the Bermuda Monetary Authority and markets USDM as “institutional‑grade,” underscoring compliance, transparency and fully collateralized reserves held in segregated accounts. The project has attracted venture backing from Coinbase Ventures and other investors, and has deployed USDM across multiple networks including Ethereum, Polygon, Arbitrum, Optimism, Base, zkSync Era, Celo and Avalanche to support DeFi integrations and wider liquidity. This launch matters in the broader stablecoin landscape because it explicitly challenges the prevailing model in which issuers capture most of the yield from underlying reserves, while holders simply maintain dollar exposure. By offering a yield‑bearing, permissionless stablecoin under a regulatory framework, Mountain Protocol is targeting both DeFi users seeking on‑chain dollar yield and institutions that require clearer regulatory status for stablecoin products. The design also aligns with a growing real‑world‑asset (RWA) trend, where on‑chain tokens are backed by and derive income from traditional financial instruments such as U.S. Treasuries. "entities":["Mountain Protocol","USDM","Coinbase Ventures","Bermuda Monetary Authority","Multicoin Capital","Castle Island Ventures","New Form Capital","U.S. Treasuries","Ethereum","Polygon","Arbitrum","Optimism","Base","zkSync Era","Celo","Avalanche"]}`

✨ AI-generated background, compiled from web sources — not editorial content.

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