Circle's stock rebounded 7% on Monday, clawing back part of the 17% single-day loss it took last Tuesday after a consortium of more than 140 companies unveiled a rival stablecoin, Open USD. The new project targets the reserve-interest revenue that funds almost all of Circle's business, and regulators have yet to rule on whether its yield-sharing model is even legal.
Circle, the issuer of the USDC stablecoin, watched its stock climb 7% on Monday as the panic sparked by rival coin Open USD eased. CRCL topped $69.52 at around 3:30 p.m. EST, after opening the day just over $64. Even so, the stock stayed more than 5% below its June 29 opening price of $75 and far under its year-to-date peak of more than $132 reached around March 18.
Why one press release cost Circle 17%
The rebound followed a turbulent session last Tuesday, when a single announcement sent Circle's stock down 17% in one day. A consortium of more than 140 companies — among them Visa, Mastercard, Stripe, Google, and Blackrock — revealed the development of Open USD, a project led by Zach Abrams that is seen as aiming squarely at Circle's core model.
That model is narrow. According to one analyst, roughly 96% of Circle's revenue comes from reserve interest earned on the cash and Treasuries backing USDC. Open USD reportedly plans to scrap minting and redemption fees and route nearly all reserve income back to the partners driving transaction volume — the opposite of Circle, which keeps almost all of that yield.
Coinbase gains leverage
The pressure lands hardest on Circle's tie to Coinbase, its main distribution partner. Coinbase earned roughly $908 million in 2024 through a revenue-sharing deal that is up for renewal in August 2026. By joining the Open USD consortium ahead of those talks, Coinbase has significantly increased its leverage.
A regulatory wall still stands
Open USD's path is not clear, though. Defi research educator Dolak1ng argues that the GENIUS Act bars stablecoin issuers from paying yield to holders, and a February proposal from the Office of the Comptroller of the Currency seeks to extend that ban to yield routed through third parties. Open Standard, the parent company behind Open USD, plans to argue its structure fits a carve-out for non-affiliated partners, leaving the model's legality unsettled.
Ozan Ozerk, founder of Openpayd, told Bitcoin.com News that the infrastructure beneath the coins is the ultimate hedge, since a firm that holds and moves every stablecoin need not bet on which one wins.
Source: Bitcoin.com News
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