Mountain Protocol launches yield-bearing stablecoin, announces seed fundraise

Mountain Protocol, which was licensed by the Bermuda Monetary Authority as a digital asset issuer on July 27,  is launching what it says is the first nationally-regulated, yield-bearing stablecoin called USDM.

The ERC-20 token was designed to give non-U.S. users access to U.S. Treasury yields and can be used across a myriad DeFi protocols, Mountain Protocol wrote in a Monday in a social media thread. 

"The token is fully backed by short-term U.S. Treasuries, with the difference that USDM provides users daily rewards in the form of rebasing, currently at a rate of 5% APY," Mountain Protocol added. "The rebasing mechanism is very similar to Lido Finance's stETH and will be familiar to most in crypto."

USDM is not available to U.S. customers, nor has the asset been registered as a U.S. security. 

While Mountain Protocol said that stablecoins were the "unquestionable killer use-case of blockchains," it noted that risk-free yields currently around 5% are pushing users back into the traditional financial system. The total supply of Ethereum ETH -2.42% stablecoins has been declining over the past year and currently stands around $74 billion, according to The Block's Data Dashboard.

Mountain Protocol fundraise

Mountain Protocol also announced a fundraise led by Nic Carter from Castle Island Ventures, with additional participation from Coinbase Ventures, New Form Capital, Daedalus Angels, and others. 

Mountain Protocol co-founder and CEO Martin Carrica told The Block that the amount of the fundraising round is confidential due to regulatory requirements.