Circle shares fell more than 12% to a four-month low after a consortium of over 140 companies unveiled Open USD, a new stablecoin backed by Stripe, Coinbase, Mastercard, Visa and BlackRock. The project lets partners keep reserve income and skip minting fees, striking at one of the core economics that issuers like Circle rely on.
Circle (CRCL) shares tumbled more than 12% in Tuesday morning trading after a consortium backed by major payments, banking and crypto firms launched Open USD, a stablecoin built to challenge incumbents such as USDC. The stock recently traded at $66, its weakest level since late February.
Open USD comes from Open Standard, an independent company whose founding partners include Stripe, Coinbase, Mastercard, Visa and BlackRock alongside more than 140 businesses across payments, banking, fintech and crypto. The effort is led by Zach Abrams, co-founder of stablecoin infrastructure firm Bridge, which Stripe acquired in 2024.
A direct hit on issuer economics
Unlike most existing stablecoins, Open USD will let businesses mint and redeem tokens without fees while returning reserve income to participating partners, minus a management fee. Governance will be shared among members rather than controlled by a single issuer.
That design takes aim at how today's market makes money. Issuers such as Circle earn revenue by investing the reserves backing their tokens in short-term U.S. Treasuries and keeping most of the interest. Open USD instead plans to distribute that yield to participating businesses.
The approach echoes the Global Dollar Network (USDG), a Paxos-led consortium that shares reserve income with firms including Robinhood, Kraken and Galaxy Digital. In Europe, a group of banks and payment providers launched Qivalis to develop a euro-denominated stablecoin.
Growing competition for Circle
The launch lands as stablecoins push further into mainstream finance. The market has grown past $300 billion, and Citi has projected it could reach $4 trillion by 2030.
USDC, with a market capitalization of roughly $73 billion, has positioned itself as the regulated option for institutions, while market leader Tether's USDT holds about $145 billion in circulation. Open USD targets a different part of Circle's strategy by offering banks, payment firms and fintechs a cut of the interest earned on reserves.
Circle CEO Jeremy Allaire downplayed Open USD's threat in an X post, saying: "We welcome continued innovation and competition in the space".
Source: CoinDesk
Trading involves risk.
Risk Disclaimer
