Cardano’s New USDM Stablecoin Sparks a “Breakthrough vs. Overkill” Debate

Cardano’s upcoming Moneta USDM stablecoin is drawing a lot of attention for its advanced privacy architecture, which is being designed to meet enterprise-level compliance needs.

The project, highlighted by Cardano founder Charles Hoskinson as the potential “first Private Stablecoin,” has sparked a deep technical debate within the community.

Here’s how USDM’s advanced privacy is designed to work

Charles Hoskinson, founder of Cardano, recently shared an update from Buenos Aires, highlighting progress on what he described as the “first Private Stablecoin.”

The announcement prompted a detailed response from Andrew Westberg, a Cardano community developer, who outlined the detailed permission structures USDM aims to support.

Related: Charles Hoskinson Supports USDM After CEO Death and SEC Filing Shake-Up

According to Westberg, the system would allow individualized control over transaction visibility. Employees would see only their own payroll details, accounting staff would access amounts without personal identifiers, and legal authorities would gain temporary access through court orders.

Westberg noted that building this kind of granular control is incredibly difficult. He estimated that the infrastructure necessary for USDM is “10x to 20x” more complex than what you see with public alternatives like USDC.

But the project is already facing questions about its complexity

The project’s goal has drawn both support and doubts. Andrew Jewburg, another industry participant, questioned whether the level of complexity being built into USDM is warranted. He suggested that USDC, with its existing multi-chain support and regulatory integrations, could have served similar use cases with fewer resources. Jewburg further expressed concerns about the narrow utility of private stablecoins, particularly in mass-market applications.

Responding to this, Westberg clarified that USDC’s model does not meet the privacy requirements outlined for USDM, stating that “everything it does is public.” He encouraged individuals to consider broader scenarios beyond enterprise payroll, such as anonymous public transactions, government service payments, and cross-border remittances that comply with sanctions policies without disclosing unnecessary data.

Related: Hoskinson: Cardano’s 1.7B ADA Treasury Could Earn $5–10 Million in ADA Each Year

While USDM is being developed within the Cardano ecosystem, Westberg acknowledged that its utility may expand through interactions with other stablecoins. He noted that once assets move off the Midnight chain, privacy features may not continue.