Circle (CRCL) fell more than 17% on Tuesday after Open USD was unveiled, putting immediate pressure on the company behind USDC. The new stablecoin network comes from Open Standard, an independent company launched with backing from Stripe, Coinbase, Mastercard, Visa, BlackRock and more than 140 businesses across payments, banking, fintech and crypto.
By the close, Circle shares were below $63, their weakest level since late February and down 55% from the mid-May peak. The selloff reflected more than a reaction to a new token. Investors were looking at a rival model for how stablecoin networks are built, governed and monetized.
Open USD is targeting reserve economics, not just token distribution
The initiative is led by Zach Abrams, co-founder of stablecoin infrastructure firm Bridge, which Stripe acquired in 2024. Abrams said existing stablecoins have strong features, but businesses that want to use them at scale need a system that is open, low-cost, high-throughput, broadly accessible and aligned with their interests.
That alignment sits at the center of Open USD’s pitch. Businesses will be able to mint and redeem tokens with no fees, and reserve income will be returned to participating partners after management fees are deducted. Governance will also be shared across members instead of being controlled by a single issuer. In practical terms, Open USD is going after one of the most profitable parts of the current stablecoin market: the interest generated when reserve assets are invested in short-term U.S. Treasuries.
For existing issuers, that reserve income has become a core revenue stream. Open USD plans to split that value with participating businesses, turning the network itself into the competitive product.
Stablecoin competition is moving toward consortium-backed infrastructure
Stablecoins are now used far beyond crypto trading. The report says dollar-pegged tokens are increasingly handling cross-border payments, merchant settlement and corporate treasury activity. The market has grown past $300 billion, and Citi projects it could reach $4 trillion by 2030. That growth has drawn banks, payment companies and fintech firms into a race to establish their own digital dollar rails.
Open USD is part of a broader shift. Paxos-led Global Dollar Network, or USDG, also shares reserve income with participating firms and is backed by companies including Robinhood, Kraken and Galaxy Digital. In Europe, banks and payment providers have launched Qivalis to develop a euro-denominated stablecoin through shared financial infrastructure.
The partner list behind Open USD shows how wide that institutional push has become. Alongside Stripe, Coinbase, Mastercard, Visa and BlackRock, launch partners include BNY, Standard Chartered, DBS, U.S. Bank, Shopify, Google, IBM, Mercado Pago, Fireblocks, Anchorage Digital, MetaMask, Aave, Solana, Polygon and Ripple.
Circle faces a direct challenge to its institutional USDC strategy
For Circle, the issue is not simply another stablecoin entering the market. USDC has a market capitalization of about $73 billion and has been positioned as a regulated stablecoin for institutions, supported by partnerships with banks, payment firms and asset managers, along with regulatory approvals in jurisdictions including the U.S. and the European Union.
Tether’s USDT, by comparison, has roughly $145 billion in circulation and built its lead largely through crypto trading and payments in emerging markets. Open USD is taking aim at a different segment. It is offering banks, payment companies and fintech firms a share of the interest income generated from U.S. Treasury reserves, a part of the business that matters deeply to Circle’s model.
Circle CEO Jeremy Allaire played down the threat in a post on X. He said stablecoins represent one of the largest market opportunities in the world as the internet reshapes the infrastructure for storing and moving money, and added that Circle welcomes innovation and competition while staying focused on building the best stablecoin infrastructure possible and supporting customers and partners.