MetaMask’s mUSD: Can It Stand Against USDT, USDC, and USDe?

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MetaMask, the world’s most widely used self-custodial wallet with ~22M users worldwide, has officially entered the stablecoin market with the launch of MetaMask USD (mUSD). This development matters because MetaMask is not just another platform. It is the default entry point to Web3 for tens of millions of users. By embedding a native stablecoin directly into its wallet, MetaMask is reshaping how users onboard into crypto, trade tokens, and participate in DeFi.

The launch comes during what many analysts call the “stablecoin wars.” Exchanges, fintechs, and infrastructure providers are all racing to issue their own digital dollars. Binance has historically relied on BUSD, Coinbase has leaned on USDC to build Base, and PayPal has introduced PYUSD to extend its payments ecosystem. 

MetaMask’s decision to issue a wallet-native stablecoin signals that the competition is no longer limited to exchanges and fintechs but now includes the wallets that serve as the front door to crypto.

Key Takeaways

• First wallet-native stablecoin: MetaMask has launched mUSD, a stablecoin backed 1:1 by short-term US Treasuries and built directly into the wallet, giving users a native dollar balance without relying on external issuers.

• Fast early growth but small in scale: mUSD supply has already reached about $65M since its September 2025 launch, split across Ethereum and Linea, but it remains far from the top 50 stablecoins by market cap.

• Revenue upside from reserves: If supply reaches $1B, Treasury yields at 4% would generate about $40M annually. At $2B, annual revenue could exceed $80M, rivaling MetaMask’s average yearly swap revenue of ~$67M.

• Strengthening Linea’s ecosystem: By anchoring liquidity with mUSD, Consensys gives Linea a built-in advantage, encouraging developers, DEXs, and lending protocols to integrate the stablecoin as a default asset.

• Raising the stakes in the stablecoin wars: The launch puts MetaMask in direct competition with PayPal’s PYUSD, Circle’s USDC, and Tether’s USDT, while also pushing the wallet closer to becoming a financial superapp

What is mUSD?

MetaMask USD, or mUSD, is the first stablecoin built directly into a self-custodial wallet. Instead of relying on outside issuers like USDC or USDT that users typically buy on an exchange and then move into their wallet, mUSD lives inside MetaMask from day one.

• Every token is backed one-to-one by short-term US Treasuries, with reserves managed through Bridge and powered by the M0 protocol. 

• The design is deliberately conservative, similar to how Circle structures USDC, which helps keep the peg stable while also generating yield on the underlying collateral. 

• That yield gives Consensys, MetaMask’s parent company, a clear business incentive beyond just user adoption.

Since its launch in early September 2025, mUSD supply has grown rapidly across both Ethereum and Linea. 

• The circulating supply started below 5M at the end of August but crossed 20M by mid-September, with growth accelerating sharply in the following week. 

• As of September 22, total supply is approaching $65M, with Linea accounting for the majority of issuance and Ethereum making up the rest. 

• The split highlights MetaMask’s strategy of positioning Linea as the primary environment for low-cost transactions, while Ethereum serves as a secondary base for DeFi liquidity.

The idea behind mUSD is to strip away friction. Instead of buying stablecoins elsewhere and moving them around, users can go straight from fiat into mUSD, purchase it with a card, or swap into it from other tokens. 

• By making the dollar balance native to the wallet, MetaMask is trying to keep users inside its own ecosystem and give them an easier, cheaper way to start trading, saving, or spending.

Why MetaMask is Doing This

MetaMask didn’t launch mUSD just to follow a trend. The move is tied to three clear goals: gaining independence, strengthening its ecosystem, and building a stronger business model.

Reducing dependency on external issuers

For years, MetaMask has leaned on USDC, USDT, and DAI to provide stable value inside the wallet. That meant relying on outside issuers for something as fundamental as a dollar balance. 

With mUSD, MetaMask no longer has to depend on others. It can give users a built-in stablecoin that it controls, which also allows the wallet team to shape the experience around its own product rather than someone else’s.

Creating a native liquidity layer

Stablecoins are the backbone of liquidity in DeFi. By introducing mUSD, MetaMask is effectively planting its own foundation. The biggest winner here is Linea, Consensys’ layer 2. 

• If mUSD becomes the default stable asset for transfers, swaps, and lending on Linea, it instantly gives the network a liquidity base that could attract more developers and protocols. 

• For users, it also means a tighter connection between the wallet and the chain, making the whole ecosystem feel more cohesive.

Building a new revenue model

The financial logic is straightforward. Stablecoin issuers make money on the reserves they hold. Circle, for example, earns hundreds of millions each quarter on the Treasuries backing USDC. MetaMask now has the chance to tap into the same stream. 

• Every mUSD held by a user represents a Treasury-backed dollar generating yield. 

• For Consensys, this shifts the wallet from being mainly a service tool to a product with steady, recurring income tied to one of the safest assets in global markets.

• In short, MetaMask is using mUSD to take control of a key part of its stack, deepen liquidity across its ecosystem, and open up a business model that has already proven to be one of the most profitable in the industry.

If mUSD supply were to reach $1B, and short-term Treasuries continue to yield around 4%, the reserves would generate about $40M annually. Unlike swap fees, which fluctuate with trading activity, this income would be stable and recurring.

MetaMask’s existing business model is already significant. Since 2020, the wallet has generated more than $337M in cumulative revenue from swaps, assuming an average fee of 0.875% across all trades. 

• In the past week alone, fees totaled around $290K. Spread across nearly five years, that cumulative $337M averages out to roughly $67M per year.

• If mUSD reached a $1B supply, its $40M in annual Treasury yield would equal about 60% of MetaMask’s average yearly swap revenue. 

• At $2B in supply, the yield could exceed $80M annually, which would surpass the historical average from swap fees.

mUSD shifts the wallet from relying mainly on volatile transaction fees to a model with recurring revenue tied to the safest collateral in global markets. In practice, it means MetaMask could soon earn as much from holding user balances as it does from facilitating swaps.

User Benefits

For MetaMask users, the introduction of mUSD is meant to remove friction and bring more utility into the wallet itself. The advantages are practical and touch on almost every part of the crypto experience.

Easier onboarding

Getting started in crypto has often been clunky. A typical user might need to buy USDC or USDT on an exchange, withdraw it, and then transfer it into MetaMask. With mUSD, that process is streamlined. 

• Users can go straight from their bank account into the wallet through MetaMask’s native onramps. 

• In some regions, fees are reduced or even waived, making the first step into crypto less intimidating and less expensive.

Lower costs

Cost has always been a sticking point, especially for smaller users. On Ethereum mainnet, transaction fees can be prohibitive. By issuing mUSD on Linea, Consensys’ layer 2, MetaMask can offer stablecoin transfers and payments at a fraction of the cost. 

Negligible gas fees open the door to everyday use cases that would never make sense on Ethereum itself, such as micro-transactions, remittances, or frequent low-value swaps.

DeFi access

Stablecoins are the foundation of DeFi, and MetaMask is positioning mUSD to be the default choice within its own ecosystem. Once inside the wallet, users can immediately put mUSD to work: swapping tokens, providing liquidity, lending, or earning yield. 

Instead of moving between multiple stablecoins, users have a built-in option that plugs directly into DeFi protocols without extra steps.

Real-world spending

The benefits are not limited to on-chain activity. Through MetaMask Card, mUSD balances can be used in day-to-day life. This bridges the gap between DeFi and traditional finance, giving users the ability to treat their wallet not only as a gateway to crypto markets but as a tool for everyday payments. A dollar balance held in MetaMask can now function both as trading capital and as spending money, which strengthens the case for holding it in the first place.

Strategic Implications

The launch of mUSD has clear consequences for MetaMask and the broader stablecoin market. It puts MetaMask in direct competition with PayPal’s PYUSD in the payment sector, though the strategies are very different: PayPal is pushing its stablecoin through a 400M+ payments network, while MetaMask is targeting the 30M users already living inside Web3. 

By making mUSD native to Linea, Consensys also gives its layer 2 a built-in liquidity base, making it more attractive for DEXs, lending protocols, and developers looking for stable assets to build around, much like how USDC underpins Coinbase’s Base. 

More broadly, this changes how MetaMask is positioned. The wallet is no longer just a tool for storing tokens and signing transactions. With mUSD, users can hold a dollar balance, trade, earn, and even spend in the real world with MetaMask Card. That combination pushes MetaMask closer to the “superapp” model, blurring the line between a crypto wallet, a fintech app, and a digital bank.

The Wallet as a Superapp

mUSD shows how MetaMask is trying to move past being just a place to store keys and sign transactions. With a stablecoin built into the wallet, users can now hold dollars, trade tokens, lend through DeFi, and even spend in the real world with MetaMask Card. All of these pieces together make the wallet feel more like a financial platform than a simple crypto tool.

This is the same direction fintech apps like Revolut and Cash App have taken, bundling services so users do not have to jump between providers. The difference is that MetaMask is doing it on crypto rails, with self-custody and DeFi at the core rather than banks or card networks.

For users, the benefit is convenience: one app to move money in, manage it, and use it. For Consensys, it means more ways to capture value — swap fees, card usage, and now yield from the Treasuries backing mUSD. If adoption grows, MetaMask has the chance to become the closest thing Web3 has to a true financial superapp.

Competitive Landscape

The biggest challenge for MetaMask is adoption. Stablecoins are hard to displace because liquidity and trust are already concentrated in a few dominant names, mainly Tether (USDT) and USD Coin (USDC). 

• Research from Coinlaw (2025) shows that about 67% of stablecoin use is tied to DeFi and trading, while another 15% is linked to remittances. 

For MetaMask to gain real traction, mUSD has to convince traders, protocols, and retail users to shift away from the tokens they already rely on.

As of late September 2025, mUSD supply is about $65M, spread across Ethereum and Linea. Growth has been fast since launch earlier this month, but the token is still tiny compared to the rest of the market. 

• At its current size, mUSD does not even appear in the top 50 stablecoins by supply. That gap shows the uphill battle ahead if MetaMask wants mUSD to become more than a niche option.

The market is also getting crowded. Exchanges have started issuing their own tokens, PayPal is pushing PYUSD into payments, and even BlackRock has released an on-chain dollar product. Based on DefiLlama’s latest data, the top 10 stablecoins by market cap are:

1. Tether (USDT) – $173.0B

2. USD Coin (USDC) – $73.6B

3. Ethena USDe (USDe) – $14.4B

4. Dai (DAI) – $5.2B

5. Sky Dollar (USDS) – $4.4B

6. World Liberty Financial USD (USDL) – $2.7B

7. BlackRock USD (BUIDL) – $1.9B

8. Falcon USD (USDf) – $1.9B

9. Ethena USDTb (USDTB) – $1.8B

10. PayPal USD (PYUSD) – $1.5B

These numbers show how top-heavy the stablecoin market is. USDT and USDC alone account for more than $246B combined, leaving challengers to fight for smaller slices of the pie. For MetaMask, the opportunity lies in its 30M+ user base and its ability to make mUSD the default option inside its own wallet, but reaching the scale of the leaders will take time and consistent adoption in DeFi.

What It Means for DeFi and Stablecoin Markets

The launch of mUSD signals important shifts in the stablecoin landscape:

Wallet-native stablecoins as the next frontier

Until now, exchanges have led the way by issuing tokens to lock in liquidity and volume. With MetaMask creating its own stablecoin, wallets are showing they can also capture value by embedding digital dollars directly at the user’s entry point into crypto.

Liquidity flows could change even with modest adoption

A supply base of just a few hundred million mUSD would be enough to move liquidity in DeFi pools, lending markets, and payment rails. Because MetaMask is the default wallet for over 30M users, protocols may feel pressure to integrate mUSD simply to remain accessible.

Wallets are competing with banks and fintechs

MetaMask is no longer only a tool for holding assets. By issuing mUSD, it now plays a role more similar to a bank or fintech app, giving users the dollars they hold, trade, and spend. This blurs the line between wallets and financial platforms.

Confirmation of the “stablecoin summer” narrative

Goldman Sachs described 2025 as a period of diversification and institutional adoption for stablecoins. MetaMask’s entry underlines that stablecoins are now central infrastructure, not just products. Whoever controls them controls user deposits, liquidity, and revenue.

Competitive stakes are rising 

Exchanges, fintechs, and now wallets are fighting for the same prize: ownership of the digital dollar. mUSD adds a new front to that battle, with distribution power coming directly from MetaMask’s user base.

Our Take

MetaMask’s move into stablecoins is not about matching Tether or Circle in scale, at least not immediately. With a supply of $65M, mUSD is far from the top 50. But the significance lies in where the token sits: directly inside the world’s most used self-custodial wallet. This gives MetaMask a distribution channel that exchanges and fintechs cannot easily replicate.

Financially, the logic is compelling. If mUSD supply reaches $1B, the 4% Treasury yield translates into $40M per year, equal to around 60% of MetaMask’s historical average annual revenue from swaps. At $2B, it would surpass swaps entirely. That means MetaMask could soon have two strong revenue engines: volatile but high-margin swap fees, and steady, recurring yield income from reserves.

Strategically, mUSD locks liquidity into Linea, extends MetaMask’s influence over DeFi, and moves the wallet closer to a superapp model. The challenge will be adoption. Stablecoins are sticky, and USDT and USDC still dominate flows. To succeed, MetaMask will need to convince protocols to integrate mUSD and users to hold it. Even modest traction, however, could shift liquidity patterns in DeFi and position MetaMask as one of the few wallets capturing not only user activity but also user deposits.

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