USDM Wind-Down Overview

Following its acquisition agreement with Anchorage Digital (Annnouncement), Mountain Protocol will begin an orderly wind-down of the Mountain USD (USDM) stablecoin. This decision is based in part on the evolving U.S. regulatory landscape, including upcoming stablecoin legislation.

The wind-down process has been designed to prioritize transparency, accessibility, and user protection. It includes redemption options for both Primary Customers as well as Secondary Customers.

The wind-down process has been designed to prioritize transparency, accessibility, and user protection. It includes redemption options for both Primary Customers as well as Secondary Customers.

As part of the wind down plan, minting has been disabled and primary customers will no longer be able to buy USDM. The USDM wind down will be split into 3 phases:

• Phase 1 (May 12th to June 11): USDM Rewards will stay active for a 30-day period. During this period there are no changes to USDM, other than minting being disabled.

• Phase 2 (June 12 to July 11): Reward rate is set to 0%. There are no other changes during this phase.

• Phase 3 (to be determined, at least July 12th): USDM Reserves remaining will be deposited on a Uniswap pool against another stablecoin (stablecoin to be determined). This means that USDM stablecoins after the kick-off of Phase 3 will no longer be backed by US Treasury products held in USDM Reserves, redeemable at $1 by Mountain Protocol, and are instead backed by the correspondent stablecoin and honored by the Uniswap protocol.

For more information on the terms and conditions changes at Phase 3, visit the “Terms and Conditions - Phase 3”.

Phase 3 specifics

	Phase 1 and 2	Phase 3
Reserves holdings	USDM Reserves Ltd, an orphan SPV for the benefit of USDM holders	Uniswap pool on Ethereum with concentrated liquidity at 0.9999-1.0000 USDM
Reserve composition	Short term US Treasuries and equivalent assets, as per investment policy (link)	Elegible stablecoin (to be determined)
Redeeming counterparty	Mountain Protocol Ltd redeems 1:1 on primary market	Uniswap pool allows users to swap
Trust assumptions	Mountain Protocol operation, regulated under BMA	Collateral stablecoin, Ethereum blockchain, Uniswap protocol

This FAQ outlines key information about the wind-down, including redemption paths, timelines, and what to expect if you hold USDM.

Mountain Protocol remains committed to supporting all USDM holders throughout this transition and will continue to share updates as the process advances.

Regulatory Compliance

Mountain Protocol has engaged the Bermuda Monetary Authority (BMA) and coordinating the transition in line with Bermuda’s Digital Asset Business Act (DABA) and SCPS Guidance.

During Phase 3, compliance obligations for secondary market monitoring of USDM continue, including blocking sanctioned accounts and suspicious activity.

Users redeeming via Uniswap no longer fall under BMA-regulated activity, but AML monitoring obligations may persist depending on wallet tracing and volume thresholds.

Frequently Asked Questions

Why is Mountain Protocol winding down USDM?

This decision is based in part on the evolving U.S. regulatory landscape, including upcoming stablecoin legislation.

Can I still redeem my USDM?

Yes. All USDM holders will retain redemption options throughout the wind-down process. Users can redeem against Mountain Protocol during Phases 1 and 2. During Phase 3, users will be able to redeem on Uniswap directly.

Can I still mint new USDM?

Only through Phase 1 and 2. Minting of new USDM has been disabled. No additional supply will be issued.

Will I continue earning rewards on USDM?

USDM rewards will remain active for 30 days after the wind down announcement (Phase 1). After that period, the reward rate will be reduced to 0% and no additional rewards will accrue to USDM holders.

What should I do if I’m a Primary Customer with significant USDM holdings?

You are encouraged to redeem directly with Mountain Protocol as soon as commercially possible. If you have any extenuating circumstances please reach out to your Mountain Protocol account manager. In case you are not able to redeem during Phase 1 and 2, users will be able to redeem from Uniswap directly on an ongoing basis.

As a Primary Customer, would I have to pay any fee to redeem through the Mountain Protocol Platform?

Mountain Protocol does not charge any mint, redemption or any type of transactional fee. Through the Mountain Protocol Platform, customers will be able to redeem USDM for USDC/Fiat or other designated stablecoins at a 1:1 rate, only having to pay for gas fees when depositing the USDM on their deposit address.

What happens if I’m not a Primary Customer and I’m holding USDM on-chain?

As a USDM holder, you will be able to redeem your USDM by swapping it for other tokens through existing centralized or decentralized exchanges, including liquidity pools.

During Phase 3, the only way to redeem will be through the Uniswap protocol.

What will happen to USDM and wUSDM in DeFi protocols such as lending platforms?

Mountain Protocol has conducted a reasonable effort to reach out to protocols where USDM or wUSDM is integrated to notify them of the wind-down. While we cannot directly remove USDM or wUSDM from permissionless protocols, we recommend users withdraw their USDM/wUSDM from these platforms and proceed with redemption through the above-mentioned channels.

Is USDM still fully backed?

Yes. USDM will continue to be fully backed by reserve assets during Phase 1 and 2.

For Phase 3, USDM will continue to be fully backed, but by the eligible stablecoin/s. Note that in Phase 3, USDM backing will be on-chain held by Uniswap, in the form of stablecoins.

What happens to USDM across blockchains?

USDM issued natively can be redeemed by primary users on the Mountain Protocol Platform during Phase 1 and 2. Users can also use Chainlink’s CCIP native bridging capability to bridge their USDM to other networks if needed.

During Phase 3, users will need to bridge to ethereum using CCIP in order to be able to redeem.

Is this wind-down being conducted in coordination with regulators?

Yes. Mountain Protocol is working closely with the Bermuda Monetary Authority (BMA) throughout the wind-down process, providing regular updates to ensure user protection and full commitment to regulatory compliance and transparency.

Mountain Protocol continues to monitor USDM for illegal activity, including ML/TF and continues to work with regulators, including sanctioning addresses.

Will Mountain Protocol continue to do attestations? How do I know that USDM in circulation is fully backed?

With the commencement of Phase 3, Mountain Protocol will make available the information of the Uniswap pool that holds the USDM reserves so the public can independently conduct their own process to verify the backing of USDM.

Mountain Protocol will also do a step by step “proof of reserves” using public data as of the commencement of Phase 3. Although these numbers will change, the guide will serve as a step by step for the public.

At a high level, users will be able to find:

1. Total USDM: as the sum of all USDM issued on all native chains

2. USDM held in Uniswap contract

3. Eligible stablecoin held in Uniswap contract

Users should calculate “Total USDM in circulation” as A minus B. This should equal C.

I don’t know how to use Uniswap, how can I redeem?

Users can redeem their USDM directly using the uniswap protocol, using the Uniswap frontend (link) or using one of many aggregators, such as Odos, 1Inch or Cowswap.

Users should also reach out to the parties or methods with which they initially acquired the USDM and see if they offer a redemption feature.

NOTE: Mountain Protocol does not endorse any front-ends or aggregators and use is solely at user risk.

How can I stay informed about the wind-down process?

Mountain Protocol will communicate all updates through its website and social media. To review our official social media, please visit: https://docs.mountainprotocol.com/reference/official-media-accounts

Migration to USDG

USDM holders may be interested in migrating their holdings into Global Dollar (USDG).

USDG is supported by the Global Dollar Network, an alliance of crypto and fintech leaders including Anchorage Digital, Paxos, Kraken, Robinhood, and others. It is designed to revolutionize the reward-sharing mechanism of stablecoins, creating a structure where network participants share in the value they help create.

• Anchorage Digital clients can buy/sell, custody, trade, settle, and earn stablecoin rewards with USDG.

• USDG is 1:1 backed by USD.

Users interested in migrating into USDG should reach out to the Mountain Protocol and/or Anchorage Digital teams for more information. USDG is also available on secondary markets on Ethereum and Solana.