Anchorage Digital Acquires Mountain Protocol, Expands Stablecoin Offerings

Anchorage Digital, a leading digital asset bank, has expanded its stablecoin offerings through the acquisition of Mountain Protocol, a stablecoin issuer. The deal, which is subject to customary closing conditions and regulatory approval, will integrate Mountain Protocol's team, technology, and licensing framework into Anchorage’s existing services. The acquisition reflects a growing trend of mergers and acquisitions between crypto and traditional financial firms.

Anchorage CEO Nathan McCauley emphasized the importance of stablecoins in the crypto economy, predicting that every business will eventually use stablecoins as part of their operations. Mountain Protocol CEO Martin Carrica noted that the combined expertise of the two companies positions them to meet the increasing global demand for stablecoin services. Anchorage is the only federally chartered digital asset bank in the US, while Mountain Protocol’s stablecoin services are regulated by the Bermuda Monetary Authority.

As part of the acquisition, Mountain Protocol will begin an orderly wind-down process for its USDM stablecoin, which operates as a yield-bearing stablecoin. The stablecoin issuer ceased minting USDM on May 12, and USDM rewards will remain active for another 30 days before the reward rate is set to 0% APY. Customers can redeem their USDM through Mountain Protocol’s platform, and other USDM holders are encouraged to swap the stablecoin for other tokens on exchanges.

This acquisition comes around nine months after Anchorage introduced a stablecoin rewards program for institutions holding the PayPal USD (PYUSD) stablecoin. The move underscores Anchorage Digital’s commitment to providing a comprehensive suite of stablecoin services, which could attract more institutional investors seeking secure and regulated digital assets. The wind-down of USDM is part of a broader effort to ensure market stability and regulatory compliance, which is crucial for the long-term success of stablecoins.

As the digital asset landscape continues to evolve, Anchorage Digital’s acquisition of Mountain Protocol positions the company as a key player in the stablecoin ecosystem. By integrating Mountain Protocol’s technology and regulatory expertise, Anchorage Digital is better equipped to meet the demands of institutional clients who require stable and compliant digital assets. This strategic move aligns with Anchorage Digital’s broader vision of becoming a leading player in the digital asset space, offering a range of services that cater to institutional clients.