MetaMask announces the launch of the mUSD stablecoin! It will be launched on Ethereum and Linea, challenging the dominance of USDT.

The world's most popular self-custodial encryption wallet, MetaMask, has officially announced its entry into the stablecoin market, planning to launch MetaMask USD (mUSD) later this year. This stablecoin will first go live on Ethereum and Linea L2, and will be developed in collaboration with Bridge, a subsidiary of Stripe, and the decentralized liquidity infrastructure platform M0, aiming to become one of the core assets of the Linea Decentralized Finance ecosystem.

The Positioning and Technical Features of mUSD

Asset backing: 1:1 fully backed by high-quality, high-liquidity USD-equivalent assets.

Application Scenarios:

1. Lending platform

2. Decentralized Exchange (DEX)

3. Custodial Services

Function Integration:

· You can directly swap, transfer, and bridge across chains within the MetaMask Wallet.

· It is expected that by the end of 2025, the MetaMask card will support mUSD for consumption in real life.

Gal Eldar, the product manager of MetaMask, stated that the launch of mUSD will lower the barriers for users to enter Web3, allowing funds to "go on-chain and become productive," while also enhancing the value of wallets and the entire ecosystem.

Stablecoin Market Background: USDT Monopoly and New Regulatory Landscape

The stablecoin market is currently dominated by Tether (USDT), with a market capitalization of up to 285 billion USD.

Recently, the "GENIUS Stablecoin Act" passed by the United States provides a more supportive regulatory framework for digital dollar alternatives, which may accelerate the launch of new stablecoins.

Castle Labs analysis points out that the key to the long-term success of stablecoin projects lies in:

1. Liquidity Depth

2. Real-world availability

3. Integration with cross-wallets and DeFi platforms

Potential Advantages and Challenges of mUSD

* Advantages

1. Relying on the vast user base of MetaMask (tens of millions of active Wallets globally)

2. Deep integration with Linea L2, enjoy low fees and high transaction speed.

3. Collaboration with Bridge and M0 ensures asset security and liquidity.

* Challenge:

1. Facing the market monopoly of mature stablecoins like USDT and USDC.

2. How to establish sufficient trading pairs and liquidity pools on centralized exchanges and DeFi platforms

3. It is necessary to ensure the transparency and compliance of asset reserves to gain the trust of users and regulatory authorities.

Impact on the DeFi ecosystem

The launch of mUSD may bring the following impacts:

Promoting the growth of Linea L2 DeFi: As a native stablecoin, mUSD will become a core asset for lending, liquidity mining, and cross-chain trading.

Increase MetaMask ecosystem TVL: More funds will remain in MetaMask and its partner protocols.

Accelerating the implementation of Web3 payments: By the end of 2025, the MetaMask Card's consumption function will expand the use cases of stablecoins to daily life.

Conclusion

MetaMask enters the stablecoin market with the launch of mUSD, which not only challenges the monopoly of USDT and USDC but also represents a significant advancement in DeFi and Web3 payment scenarios. As the regulatory environment improves and cross-chain applications increase, whether mUSD can stand out in the fierce competition of stablecoins will depend on its liquidity layout, asset transparency, and the speed of real-world application implementation.