Anchorage Digital to acquire Mountain Protocol in its stablecoin push

TL;DR

• Crypto bank Anchorage Digital is set to acquire yield-bearing stablecoin issuer Mountain Protocol.
• The move will allow Anchorage Digital to enter the stablecoin market.

Anchorage Digital to Acquire Mountain Protocol

Anchorage Digital, a federally chartered crypto bank and custodian, announced on Monday that it has agreed to acquire stablecoin issuer Mountain Protocol. This latest development is part of the company’s strategy to deepen support for institutional stablecoin use.

Anchorage added that it intends to integrate the Mountain’s technology, team, and licensing structure into its own operations, pending closing procedures and regulatory sign-off.

In its blog post, Mountain Protocol revealed that it will phase out the USDM token in an orderly wind-down process as part of the acquisition.

While commenting on this deal, Nathan McCauley, co-founder and CEO of Anchorage, said,

"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. 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."

The deal comes as stablecoin adoption continues to gain traction, with payment firms, fintechs, and even banks looking to enter the market ahead of possible legislation in the United States

Citi predicts that the stablecoin market could grow to trillions of dollars in this decade from the current $230 billion size. Furthermore, the market’s competitiveness continues to increase, with the USDC issuer, Circle, recently acquiring tokenization startup Hashnote, the yield-bearing USDY token issuer.

Mountain Protocol issues the yield-bearing USDM stablecoin backed by short-term U.S. Treasuries. The stablecoin was launched in 2023 and saw its supply surge to a high of $150 million during its early months. However, it has since declined to $50 million.