Key Takeaways:
A consortium of more than 140 companies backed by Visa, Mastercard and BlackRock unveiled a zero-fee stablecoin that could reshape the economics of the $300 billion market.
Circle Internet Group shares fell more than 16% on Tuesday after a consortium of more than 140 financial and technology companies announced plans to launch Open USD, a dollar-backed stablecoin that directly challenges Circle's USDC. Coinbase Global shares also declined on the news.
"USDC remains the most trusted, widely adopted, institutional-ready stablecoin in the world, and we count thousands of institutions as partners in our ecosystem across nearly every major sector," Jeremy Allaire, chief executive officer of Circle, said in a post on X. He added that the company welcomes competition.
The consortium backing Open USD includes Visa, Mastercard, American Express, Stripe, BlackRock, BNY Mellon, Coinbase, Alphabet's Google, IBM, Klarna, Standard Chartered, DBS, Shopify, SoFi, Adyen, Gemini, Galaxy, Ripple, Crypto.com and Polygon, among more than 130 other firms. Open Standard, the independent entity behind the token, said users will be able to mint and redeem OUSD at no cost, with nearly all reserve income distributed back to participating companies rather than retained by the issuer. The model contrasts with Circle and Tether, which keep most reserve income from their tokens. USDC has approximately $73.6 billion in circulation, while the combined USDC and USDT market share accounts for roughly 80% of the more than $300 billion global stablecoin market.
The threat to Circle is twofold: Open USD could erode USDC's market share and compress the reserve income that underpins Circle's valuation. For Coinbase, which shares USDC revenue and counts subscription and services income — 44% of first-quarter total revenue — the risk is indirect but material. Open USD is expected to launch later this year across Solana, Stellar, Base and Polygon, with Bridge co-founder Zach Abrams serving as interim CEO of Open Standard.
Why the consortium model threatens Circle's moat
Open USD's revenue-sharing structure is the key differentiator. Where Circle and Tether retain most of the interest income generated by the Treasury bills and cash backing their tokens, Open Standard will pass nearly all of that yield back to the companies that integrate and distribute the stablecoin. For large payment networks and banks, that creates a direct financial incentive to promote OUSD over USDC in merchant settlement, cross-border payments and treasury operations.
The consortium's breadth also matters. Having Visa, Mastercard and American Express on the same side of a stablecoin project is unprecedented — these networks compete fiercely in traditional payments but have aligned behind a single token standard. Stripe, which has been building a vertical stablecoin stack including the Tempo blockchain and Machine Payments Protocol, brings merchant distribution. BlackRock, the world's largest asset manager, brings institutional credibility and potential demand from its money-market fund ecosystem.
Regulatory tailwinds support the new entrant
The Open USD launch comes as US lawmakers move toward establishing clearer rules for stablecoins. The CLARITY Act is advancing toward a Senate vote, while the GENIUS Act has already established federal standards governing stablecoin reserves and licensing. The evolving framework favors well-capitalized institutions with established compliance infrastructure — a description that fits the Open Standard consortium more closely than it does Circle or Tether.
Patrick Witt, executive director of the President's Council of Advisers for Digital Assets, described the launch as "another example of how clear rules of the road can unlock massive value." He added, "What GENIUS did for stablecoins, the Clarity Act will do for all other digital assets."
A Coinbase spokesperson emphasized the company's continued support for USDC, saying the exchange views stablecoins as a "rising tide" where more issuers and more distribution benefit the entire category. Still, the market's reaction suggests investors see Open USD as a direct threat to the USDC-centric revenue model that both Circle and Coinbase have built their crypto strategies around.
This article is for informational purposes only and does not constitute investment advice.
