Owning MUSD: Uses, Storage and Risks

MUSD is Mezo’s Bitcoin-backed stablecoin. You can use it as a dollar-denominated asset for payments or to hold value on supported networks, but its target is not a guarantee that every MUSD can always be sold for exactly one U.S. dollar. The project’s model lets people deposit BTC as collateral and borrow MUSD against it, rather than issuing the token as a claim on a bank deposit.

Mezo describes MUSD as redeemable for BTC. That means the value you receive when redeeming can depend on the redemption process and the value of Bitcoin; it is not the same as withdrawing dollars from a bank. The token may also trade above or below its target on markets. Before relying on it for a payment or short-term cash need, check that the recipient accepts MUSD on the same network you plan to use and confirm the amount you will receive.

MUSD is created through a collateralized debt position, or CDP. A borrower deposits BTC, then borrows MUSD against that collateral. The Bitcoin backs the debt, while the borrower must keep enough collateral in the position to meet Mezo’s requirements. Mezo describes the system as over-collateralized: its stated system ratio is above 110%, and typical user positions are above 150%. These are model descriptions, not a promise that every individual position is equally protected.

Bitcoin’s price can fall quickly. If a position drops below its minimum collateral ratio, Mezo says it can be liquidated automatically to help keep MUSD backed. Borrowing can therefore cost you some or all of your deposited BTC if you do not maintain the required collateral. The project describes borrow rates as fixed for the length of a loan, but check the current terms before opening a position; a fixed rate does not remove liquidation risk or guarantee that MUSD will hold its dollar target.

MUSD is issued on Mezo, Ethereum and Base. It is not listed as the native token of any of those chains; it is a token available across them. A balance on one network does not automatically appear on another, and sending MUSD to an address on the wrong network can make it difficult or impossible to recover.

Use a wallet that supports the network you intend to use and can display or manage MUSD there. Before receiving or sending funds, confirm the network in the wallet and the token details from a trusted Mezo interface. Do not rely on a token name or ticker alone: unrelated tokens can use similar names. If you plan to move MUSD between networks, check the supported transfer route and its terms first. A transfer may involve a bridge or other service, each with separate fees and technical risks. Make a small test transfer when practical, and keep your recovery phrase offline; no legitimate support agent needs it.

As of 2026-11-08, MUSD’s circulating and total supply were both about 19.0 million tokens, with no maximum supply listed. Its market price was about $0.991, slightly below the one-dollar target. The market capitalization was about $18.9 million on that date. These figures change, and market prices can differ between exchanges and networks.

Supply can change as users open or repay collateralized loans and as tokens move through the system. A large supply figure by itself does not prove that the peg is secure: the condition of the collateral, redemption arrangements, liquidity and confidence in the system also matter. If you are checking MUSD before a transaction, look at its price and available trading liquidity on the exact network and venue you intend to use. Do not assume the quoted price on one market is available everywhere or that a past price guarantees a future one.

Holding MUSD involves more than ordinary stablecoin price risk. Bitcoin collateral can lose value, borrower positions can be liquidated, and the token can trade below its target if buyers, liquidity or confidence weaken. You also face smart-contract, network and bridge risks when using onchain tokens. Redemption for BTC depends on the system’s rules and operation; it is not equivalent to a guaranteed cash withdrawal.

For safer storage, use a wallet you control or a reputable custody service, protect your recovery phrase offline and never share it. Confirm the network and token before signing a transaction, and review approvals before granting a contract access to assets. Keep only the amount you need in a connected wallet, especially if you are using unfamiliar apps. A stablecoin can still lose value or become difficult to move, so avoid treating MUSD as risk-free savings or keeping money in it that you cannot afford to have tied up.