Open USD backed by 140 firms upends stablecoin economics

A stablecoin backed by 140 firms including Visa, Mastercard and BlackRock is sharing reserve income with distributors, upending the economics of the $310 billion market.

Open USD, a new stablecoin launching on the Stellar blockchain, will share nearly all reserve income with distribution partners and charge zero mint or redeem fees, a model that directly undercuts Circle's USDC economics.

"The traditional stablecoin model concentrates economic value with the issuer," Jack Forestell, Chief Product and Strategy Officer at Visa, said in announcing the Visa Stablecoin Platform, which will support Open USD natively. "We're flipping that — the value flows to the institutions distributing it."

The Open Standard consortium behind the token counts more than 140 members, including Visa, Mastercard, Stripe, BlackRock, Alphabet, BNY, Coinbase, Samsung and IBM. The Visa Stablecoin Platform, currently in beta, bundles Wallet-as-a-Service infrastructure with dual-control approval workflows, audit logging, passkey authentication and configurable counterparty allow lists, letting banks and fintechs mint, hold, transfer and redeem stablecoins without building the plumbing themselves.

The move threatens Circle's dominance in a market that has swelled to more than $310 billion in total circulation, with Morningstar projecting it could reach nearly $1.5 trillion by 2035. Circle shares fell 6% on the news, while Coinbase dropped 4.5% and Visa rose 2%, according to Bloomberg data. Open USD is slated to go live later this year.

The Revenue Model That Shook Circle

Open USD charges zero fees for minting and redeeming tokens and returns nearly all income from its reserve — held in short-term US Treasury bills under the GENIUS Act framework signed into law in July 2025 — to the banks, fintechs and payment processors that distribute it. That structure directly undercuts Circle's economics, where the issuer retains reserve yield as its primary revenue source.

The pricing model explains why the market reacted the way it did. Circle, the issuer of USDC — the second-largest stablecoin by market cap — saw its shares tumble 6% on the announcement. Coinbase, which shares USDC distribution revenue with Circle through a longstanding partnership, fell 4.5%. Visa's stock gained about 2%.

Systemic Risk Warnings Emerge

Not everyone is celebrating the model. Vivek Iyer, partner and financial risk advisory services leader at Grant Thornton Bharat, warned that widespread adoption of Treasury-backed stablecoins could create systemic risk. "The greater the adoption of stablecoins backed by Treasury securities, the greater the impact of any change in the value of the underlying assets," Iyer said. He drew parallels to the 2008 subprime crisis, arguing that a loss of confidence in US Treasury securities could trigger contagion through the stablecoin system.

The Reserve Bank of India has also cautioned that private stablecoins could threaten domestic monetary sovereignty, warning that payment networks operating outside the banking ecosystem could weaken monetary policy transmission.

Stellar's Shot at Relevance

For the Stellar blockchain, which hosts Open USD, the consortium-backed stablecoin represents a potential turning point. Stellar has long positioned itself as a payments-focused network but has struggled to capture the same mindshare as Ethereum or Solana in the broader decentralized finance ecosystem. Open USD's revenue-sharing model could drive significant demand for Stellar-based real-world asset tokenization, boosting transaction volumes and validator economics on the network.

The broader payments industry is already pivoting. Mastercard acquired stablecoin infrastructure company BVNK for nearly $2 billion earlier this year. PayPal continues expanding its PYUSD stablecoin. Visa's platform, combined with the zero-fee economics of Open USD, signals that both major card networks now view stablecoins as core infrastructure rather than a niche experiment.

The Visa Stablecoin Platform remains in beta with select clients, and the company has not disclosed a timeline for general availability. Open USD is expected to launch later this year.

This article is for informational purposes only and does not constitute investment advice.