Cosmos-based Noble first to launch custom stablecoin using cryptodollar infrastructure startup M^0
2024-12-05

The Cosmos-based Noble blockchain is the first to launch a new dollar-denominated token, USDN, using decentralized stablecoin infrastructure provided by stablecoin upstart M^0, according to an announcement on Thursday.
This represents something of a moment of truth for the buzzy M^0 project, which is attempting to bridge the gap between permissioned stablecoin issuance and the power of decentralized networks. 
M^0 is a protocol on Ethereum that provides a “stablecoin extension engine,” enabling developers to take M^0’s canonical stablecoin, $M, and customize various features, including branding, built-in compliance tools and yield distribution.
In other words, the M^0 network, backed by the likes of Bain Capital, Galaxy Ventures and Wintermute Ventures, offers “turnkey middleware” solutions for launching stablecoins. In true crypto-fashion, it aims to grow into a “federation of stablecoin issuers.”
$M stablecoin issuance is limited to approved “minters” who must be approved by governance token holders and follow policies agreed upon by M^0’s established rules as well as their local regulations. The token is backed solely by short-dated U.S. Treasurys.
Noble, for its part, is an application-specific blockchain (a.k.a. “appchain”) focused primarily on facilitating stablecoin transfers across different blockchains through the Inter-Blockchain Communication (IBC) protocol. It acts as an intermediary between stablecoin issuers, including Circle, Hashnote Labs, Monerium and Ondo Finance, to get their stablecoins on a growing number — around 50 at last count — of Cosmos-based chains. 
The company, which recently closed a $15 million Series A funding round led by Paradigm, has already helped facilitate over $5 billion of transaction volume in its first year.
USDN will leverage $M as its “core building block” to provide the broader Interchain ecosystem with “a credibly neutral digital dollar,” the company said in a statement. 
“This collaboration not only advances Cosmos-native stablecoin adoption but sets a new precedent for stablecoin design by focusing on safety, programmability, and interoperability,” Noble CEO Jelena Djuric said. “We’re excited to redefine what stablecoin infrastructure can achieve within decentralized finance.”
Unlike leading stablecoins USDT and USDC, which funnel interest revenues to their issuers Tether and Circle, the yield the M^0 protocol earns from these backing assets is shared with approved distributors called “earners,” which include market makers Caladan, Galaxy, GSR and Wintermute.
Further, M^0 is designed so that these customized cryptodollars share liquidity, security and yield distribution, meaning that every M-based stablecoin benefits as the network grows. 
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.