Mehen Finance, the entity behind the USDM stablecoin on Cardano’s blockchain, is gearing up for a public retail rollout slated for April. The stablecoin officially debuted on Cardano’s network on March 17 and is currently accessible solely to institutional users. Matthew Plomin, founding partner of Mehen Finance, disclosed plans for the forthcoming retail rollout during a recent interview with Cointelegraph.
Unique features and regulatory implications
USDM, much like other fiat-backed stablecoins, is designed to maintain a 1:1 peg with the US dollar. However, it boasts a distinctive feature aimed at preventing over-issuance. The stablecoin’s reserve is directly reported to Charli3, a decentralized oracle tailored to the Cardano ecosystem. This integration ensures transparent real-time transfers and eliminates the possibility of excess minting.
In addition to its technical attributes, USDM is touted as an unfreeze stablecoin, a notable departure from counterparts like USDC and USDT. While some laud this characteristic as a significant advantage, others caution that it could attract regulatory scrutiny. Vanessa Harris, a prominent crypto commentator, has expressed concerns that regulators might resort to freezing USDM-linked bank accounts, potentially jeopardizing its peg to the US dollar.
Regulatory compliance and institutional adoption
Mehen Finance, headquartered in New York, has proactively pursued licensing approvals from regulatory bodies across the United States. The company has secured regulatory clearance from 17 states, with plans for additional approvals in the pipeline. Furthermore, Mehen intends to obtain money transmitter and virtual asset service provider licenses in Europe and the United Kingdom later this year, underlining its commitment to regulatory compliance and global expansion.
USDM’s reserve is held in government-only money market mutual funds at reputable financial institutions such as Fidelity and Western Asset Management to bolster confidence in its stability and security. Plomin emphasizes that these funds are not utilized as banks, underscoring Mehen’s adherence to stringent regulatory standards.
Innovative investment strategy
Mehen Finance is set to embark on its maiden investment round through a crowdfunded equity raise, a departure from conventional fundraising methods in the crypto space. Using regulated crowdfunding signifies Mehen’s commitment to transparency and regulatory compliance. Plomin disclosed plans to tokenize the company’s Series A shares on the Cardano blockchain, enabling global accessibility to investors.
The investment raised will be facilitated through ChainRaise, a crowdfunding platform, offering individuals worldwide an opportunity to participate in Mehen’s growth trajectory. By embracing this innovative approach, Mehen aims to democratize access to investment opportunities while fostering community engagement and support.