On June 30, Open Standard, a stablecoin initiative backed by 140 globally recognized companies, officially announced its plans and said it intends to launch a new U.S. dollar stablecoin, Open USD (OUSD), later this year. The project was widely seen as a direct challenge to Circle and USDC. Following the announcement, Circle (NYSE: CRCL) shares briefly fell more than 17%. After Jeremy Allaire responded publicly, the stock rebounded as much as 4% intraday on July 1 before ultimately closing down 1.09%.
Allaire’s response was aimed at investors asking how Circle views the OUSD initiative. His central message was straightforward: the stablecoin market is not simply about issuing another dollar token with more attractive terms. Instead, it is a platform market shaped by durable network effects, liquidity concentration, and regulatory integration. In that kind of market, he argued, long-term leaders tend to become structurally difficult to displace.
Why Allaire says stablecoins favor a winner-take-most structure
According to Allaire, stablecoin networks function much like public internet protocols and software layers. Their strength depends not only on circulation but on how many developers, applications, service providers, and enterprises are integrated into the network. Every additional integration increases utility for existing participants, which in turn attracts more builders and more usage, ultimately reinforcing demand for the digital dollar embedded in that network.
He argued that USDC has already achieved this at meaningful scale. Over nearly 10 years, Circle has worked to build a broad ecosystem around USDC, and the network now includes thousands of integrated services. For application builders, that means immediate access to existing infrastructure and market reach. For users, it means interoperability across a wide set of products and venues. Allaire said that this process is now accelerating further as mainstream institutions connect themselves and their customers to the USDC network.
Circle has also invested in a software stack designed to extend that network effect. Allaire specifically referenced CCTP and Gateway, describing them as protocols that improve interoperability, security, and liquidity on a global basis. In his framing, these tools allow developers to plug into liquidity that already exists instead of trying to bootstrap everything from scratch. He added that Circle is now seeing this stack introduced across more chains, permissioned Layer 2 environments, and even networks built by governments.
Liquidity is the moat Circle believes competitors cannot easily replicate
Allaire’s second major point was that liquidity creates its own compounding advantage. In his view, a stablecoin cannot become truly useful at scale unless it has deep primary-market and secondary-market liquidity. Primary-market liquidity requires direct banking relationships and redemption access through major global financial centers. Secondary-market liquidity requires broad trading and settlement availability across exchanges, DeFi venues, payment service providers, payment companies, and regional financial markets, all linked to different fiat rails.
He said Circle has spent close to a decade building exactly that liquidity network. Today, USDC liquidity is embedded across centralized exchanges, DeFi platforms, PSPs, payment companies, and regional exchanges. Just as important, he argued, that liquidity is not concentrated in one venue. Instead, it is distributed across dozens of platforms globally, which makes USDC more resilient and more functional as a transfer and settlement asset.
To support the argument, Allaire cited data from third-party analytics firm Artemis. He said that in Q1 2026, USDC processed nearly $30 trillion in on-chain volume, representing 80% of all U.S. dollar stablecoin transaction volume on blockchains. USDT accounted for the other 20%, while all remaining dollar stablecoins combined registered effectively 0%, meaning less than 0.5%. In his interpretation, many smaller stablecoins may show some circulating supply, but much of that volume is still driven by incentives and promotional activity rather than sustained, organic usage.
He also emphasized relative scale. In his telling, BTC, USDT, and USDC are the three most liquid digital assets globally. By contrast, the nearest alternative dollar stablecoins are only around one-tenth the size of USDC, and their liquidity is often concentrated in a single exchange order book rather than distributed across a global market structure. Building that kind of broad liquidity, he argued, is a multi-year undertaking that new entrants cannot shortcut.
Regulatory integration and licensing are another major barrier
Allaire’s third pillar was policy and regulatory integration. He said stablecoins increasingly operate within formal legal frameworks, and the issuers that succeed globally are those that spend years obtaining licenses, building reserve management systems, and creating treasury and banking operations capable of functioning across multiple jurisdictions. This, in his view, is one of the least visible but most important barriers to entry.
He pointed to a specific example, saying that USDC is currently the only large global stablecoin available across all of Europe or Japan. He presented this not as a marketing slogan but as evidence that global usability depends on official recognition, registration, licensing, and acceptance in key markets. To operate at that level, an issuer needs robust banking relationships, reserve management, treasury functions, and liquidity systems that can support activity across global markets on a near-24/7 basis.
For that reason, Allaire described Circle and its broader partner base as builders of what he called the most trusted and accessible digital dollar infrastructure in the world. He stressed that this result reflects years of investment by Circle and thousands of ecosystem partners. Any challenger, he suggested, must compete not only with USDC’s token distribution but with a much larger international operating system behind it.
Allaire’s rebuttal to OUSD’s main selling points
Allaire also addressed the claims that OUSD could be superior to USDC in several respects. The first was free minting and redemption. He acknowledged that market participants, especially payment companies, care deeply about redemption costs. However, he said the market has a structural reality: if a stablecoin offers strong redemption infrastructure, deep liquidity, and no fees across all exits, it can become the preferred off-ramp for competing stablecoins, absorbing asymmetrical costs in the process.
That is why, in his view, “unlimited free redemption” sounds easy in theory but may prove difficult in practice. He said Circle’s approach is not based on a blanket fee waiver. Instead, it uses contractual and commercial mechanisms to address different redemption scenarios in a more durable way. His point was that sustainable market design matters more than headline pricing.
The second issue was revenue sharing. Allaire did not deny that the stablecoin market could become orders of magnitude larger than it is today. But he argued that Circle’s strategy is to grow the ecosystem through an expanding set of partner models involving exchanges, custodians, payment companies, and asset issuers. He described this as a “Big tent mentality”—a broad coalition approach designed to let more participants benefit as the ecosystem scales, rather than relying on a narrow incentive scheme.
The third point, and the one he criticized most directly, was alliance-based governance. Allaire said consortium products have a poor record when it comes to achieving scale, finding product-market fit, and maintaining basic product agility. There are cases in finance where utilities are operated by consortiums, he acknowledged, but these structures often move slowly, suffer from misaligned incentives, and underinvest in the operating entity itself.
He added that Circle had effectively tried this approach in USDC’s early history. Even with a relatively small number of participants, the model produced significant complexity and operational challenges. In contrast, he argued, smaller and tighter strategic collaborations led by independent builders almost always outperform large alliances. Many corporations may initially support consortium structures for signaling reasons, he suggested, but in actual operations they eventually choose the option that best serves customers, which often means partnering with the market leader on long-term commercial terms.
Coinbase remains a key partner as Circle broadens its infrastructure stack
Allaire also responded to market commentary around Circle’s relationship with Coinbase. He said the partnership remains as strong as ever and that both companies see major opportunities to expand the USDC network further. That statement was important because some observers interpreted the emergence of OUSD and similar initiatives as a sign that the established stablecoin partnership landscape could weaken. Allaire’s message was that Circle’s most important channel relationships remain intact.
At the same time, he made clear that Circle’s ambitions now extend beyond a single stablecoin product. He highlighted a broader stack including Arc, CCTP, CPN, StableFX, and Agent Stack. According to him, Circle is already working with dozens of other stablecoin issuers, helping them issue through Arc, use Circle’s interoperability infrastructure, gain wallet support, and participate in settlement and FX workflows on CPN and StableFX.
That framing positions Circle not just as the issuer of USDC but as a core infrastructure provider for the wider stablecoin market. Even some of the founding members involved in OUSD, Allaire said, are expected to remain meaningful USDC partners and customers. In other words, Circle is presenting itself as the foundational layer that other issuers and institutions may still rely on, even if they pursue their own branded tokens.
Allaire closed by saying Circle remains deeply bullish on the growth of the stablecoin ecosystem and welcomes OUSD as a new member of the broader community. But the practical conclusion of his remarks was unmistakable: in stablecoins, the decisive advantages do not come from slogans about openness or lower fees alone. They come from years of accumulated integrations, globally distributed liquidity, regulatory approvals, banking access, and operational execution at scale.