TLDR
- Circle (CRCL) stock fell more than 13% to around $65, hitting a four-month low after rival stablecoin news broke.
- A consortium of over 140 companies, including Visa, Stripe, Mastercard, BlackRock and Coinbase, announced a new stablecoin called Open USD.
- Open USD is run by Open Standard and led by Zach Abrams, co-founder of Bridge, the stablecoin firm Stripe bought in 2024.
- Unlike Circle’s USDC, Open USD plans to let partners mint and redeem tokens for free and share reserve income among members.
- Circle CEO Jeremy Allaire downplayed the threat, saying USDC remains the most trusted stablecoin and welcoming competition.
Circle Internet Group stock dropped hard on Tuesday. Shares fell as much as 14% before settling down around 13%, trading near $65, their lowest level since late February.
The selloff followed news that a group of more than 140 companies plans to launch a competing stablecoin. The new token is called Open USD, and it’s aimed squarely at Circle’s USDC.
Coinbase stock also slid on the news, down about 6% to $142.37. That’s notable because Coinbase co-founded USDC with Circle and has long split revenue from it.
Who’s Behind Open USD
The list of partners is long and includes some heavyweights. Visa, Mastercard, Stripe, BlackRock and Coinbase are founding partners, alongside banks like BNY, Standard Chartered and U.S. Bank.
Tech names are in the mix too. Google and IBM both signed on, as did crypto players Ripple, Solana, Polygon and Aave.
The project is run by an independent company called Open Standard. It’s led by Zach Abrams, who co-founded Bridge, a stablecoin infrastructure firm that Stripe acquired back in 2024.
Abrams framed the pitch around openness and cost. He said existing stablecoins have strengths, but businesses need something open, low-cost and aligned with their interests at scale.
This isn’t exactly a surprise to close watchers of the space. A CoinDesk report earlier this month already flagged that Stripe, Visa and Mastercard were working on a rival stablecoin platform, with Coinbase reportedly considering joining in.
How Open USD Differs From USDC
The structure is where things get interesting for Circle’s business model. Open USD will let businesses mint and redeem tokens with no fees attached.
Reserve income tells a similar story. Instead of one company keeping most of the interest earned on reserves, Open USD plans to split that yield among participating partners after covering costs.
That’s a direct hit on how Circle makes money. Circle invests USDC reserves in short-term Treasuries and keeps most of the interest, a setup Open USD is built to undercut.
Governance will also be shared among members rather than sitting with a single issuer. This mirrors USDG, a similar consortium-style stablecoin backed by Paxos, Robinhood, Kraken and Galaxy Digital.
USDC currently has about $73.6 billion in circulation, making it the largest U.S.-based stablecoin. Tether’s USDT is bigger globally with roughly $145 billion outstanding, but it leans more on crypto trading and emerging markets.
For Coinbase, the stakes are real too. USDC-tied revenue helped make up 44% of Coinbase’s subscription and services segment in the first quarter.
Circle CEO Jeremy Allaire responded on X Tuesday, calling USDC “the most trusted, widely adopted, institutional-ready stablecoin in the world.” He said Circle counts thousands of institutions as partners.
A Coinbase spokesperson struck a similar tone, saying more stablecoin issuers and use cases mean more people using stablecoins overall, and that USDC remains a cornerstone of its platform.
Open USD is expected to launch later this year, according to Open Standard’s announcement.
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