US digital asset bank Anchorage Digital plans to acquire the Mountain Protocol, the issuer of the USDM stablecoin. The company did not disclose terms, and it’s subject to regulatory approval. Anchorage says it is expanding its footprint in the stablecoin sector to help institutions to “meet the moment”.
“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,” said Nathan McCauley, CEO and Co-Founder of Anchorage Digital. “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.”
This vision builds on Anchorage Digital’s established relationships with major financial institutions that includes providing custody for BlackRock and institutional crypto exchange EDX Markets whose founders include Citadel Securities, Fidelity and Schwab. Beyond crypto applications, stablecoins are starting to play a role as collateral in intraday margin, with the Commodity Futures Trading Commission (CFTC) recently launching pilots and the CME announcing trials.
Bermuda regulated Mountain Protocol, which launched in mid 2024, is winding down its interest bearing USDM stablecoin. USDM had a market capitalization of less than $50 million. The team and technology will be absorbed into Anchorage.
Anchorage Digital’s stablecoin activities
This acquisition bolsters Anchorage’s already expanding footprint in the stablecoin ecosystem. Last year Anchorage announced it was one of the members of the Paxos-founded Global Dollar Network, a stablecoin protocol where the earnings on reserves are shared amongst distributors. The bank also runs a novel stablecoin rewards program where stablecoin holders can earn rewards but their digital currency is not lent out.
Whereas most stablecoins do not pay interest to end users, Anchorage’s acquisition of an interest bearing protocol is notable. Current draft US stablecoin legislation recently introduced a ban on issuers paying interest to end users. However, it does not prevent third parties paying interest. A recent Treasury meeting discussed the advantages of stablecoins offering interest. It’s conceivable that the technology could be adapted to be used for Anchorage’s reward program or as a solution for Anchorage to provide a service to clients to issue stablecoins.
Meanwhile, the news comes at a time of immense activity in the stablecoin sector. One of Anchorage’s major backers is Visa, which recently invested in one stablecoin infrastructure firm, BVNK, and partnered with another, Stripe’s Bridge, to enable users to spend their stablecoin balances using Visa cards.
Additionally, Stripe launched stablecoin accounts for businesses in emerging markets and Coinbase launched the x402 protocol for internet native payments. While it hasn’t yet been confirmed, Meta is reported to be exploring using stablecoins for payouts.
