Crypto-native bank Anchorage Digital is deepening its footprint in the stablecoin sector by acquiring Mountain Protocol, a Bermuda-regulated stablecoin issuer. The deal, which awaits regulatory approval and customary closing conditions, will see Anchorage absorb Mountain Protocol’s team, technology stack, and licensing framework.
Anchorage, the only federally chartered digital asset bank in the United States, said in a May 12 statement that the acquisition aligns with its long-term strategy to offer robust, institutional-grade crypto infrastructure. While financial terms were not disclosed, the move reflects a growing convergence trend between traditional finance and crypto firms.
As part of the acquisition, Mountain Protocol will begin an “orderly wind-down” of its flagship stablecoin, Mountain USD (USDM), a yield-bearing token issued on Ethereum. The company ceased minting new USDM and announced that reward yields would continue for 30 days before dropping to 0% APY. Holders can redeem their tokens directly on the Mountain Protocol platform or swap them on secondary markets.
USDM made a notable entry into the stablecoin market following its late 2023 launch, reaching a market cap of $155 million by March 2024. However, that figure has since dropped to under $50 million, with around 10,820 holders, according to RWA.xyz.
Anchorage CEO Nathan McCauley emphasized that stablecoins are becoming “the backbone of the crypto economy,” predicting widespread adoption among businesses. Mountain Protocol CEO Martin Carrica echoed that sentiment, highlighting how the merger creates a foundation to meet accelerating global demand for regulated stablecoin services.
This development follows Anchorage’s August 2024 rollout of a stablecoin rewards program for institutional holders of PayPal USD (PYUSD), marking a clear pivot toward stablecoin-centric growth.
Meanwhile, the U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into PayPal’s dollar-backed stablecoin, PYUSD, opting not to pursue any enforcement action. The decision was disclosed in a regulatory filing on April 29, marking a regulatory win for the payments giant.
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