Consensys-developed self-custodial wallet, MetaMask, has introduced its native stablecoin, MetaMask USD (mUSD). The launch is significant as it marks the first instance of a self-custodial wallet issuing a native stablecoin.

The asset is issued by Bridge, a Stripe-owned stablecoin platform, and operates on-chain through M0, a decentralized infrastructure designed for stablecoin liquidity.

MetaMasks mUSD

Unlike most stablecoins that exist independently of wallet providers, mUSD will be directly embedded into MetaMasks interface. According to the official blog post, this design will allow users to hold, transact, and bridge dollar-denominated value without leaving the application.

Initially, mUSD will be available on Ethereum and Consensys-backed Layer 2 network Linea. It is expected to be integrated into core DeFi protocols such as decentralized exchanges and lending markets in the near future.

MetaMask revealed that it aims to expand total value locked (TVL) and increase protocol activity within the Linea ecosystem by adding liquidity provisioning and fiat onboarding. The design of mUSD is cross-chain compatible, which will enable it to function as a composable, neutral asset across decentralized applications and payment systems.

Beyond on-chain use, MetaMask also plans to extend the stablecoins utility into everyday spending. A MetaMask Card, for instance, is set to debut by year-end in partnership with Mastercard, which will let holders spend mUSD directly at merchants across the world.

Gal Eldar, Product Lead at MetaMask, commented on the development,

MetaMask USD is a critical step in bringing the world on-chain. By integrating natively into MetaMask’s product offering, it will allow us to cut through some of the most stubborn barriers in web3 and reduce both friction and costs for people onboarding directly into a self-custodial wallet. With MetaMask USD, users can bring their money on-chain, put it to work, spend it almost anywhere, and use it like money should be used.

GENIUS Act

The rollout comes shortly after the passage of the US GENIUS Act, which provides the first federal guidelines for payment stablecoins, thereby creating a clearer regulatory backdrop for such launches.

The Guiding and Establishing National Innovation for US Stablecoins Act was signed into law on July 18 this year. It requires stablecoins to be backed 1:1 by US dollars or other low-risk assets. Only institutions such as banks, credit unions, and approved nonbank financial companies may issue stablecoins upon authorization from the Federal Reserve.

Permitted reserve assets include physical currency, US Treasury bills, and short-term low-risk instruments like repurchase agreements. To enhance accountability, GENIUS has a provision that requires issuers to publish reserve compositions and undergo regular independent audits by certified accounting firms. The act also enforces compliance with the Bank Secrecy Act, thereby obligating issuers to implement systems against money laundering and terrorist financing.