On June 30, Open Standard, a stablecoin initiative backed by 140 globally recognized companies, officially announced plans to launch a new dollar stablecoin, Open USD (OUSD), later this year. The announcement was widely interpreted as a direct challenge to Circle and USDC. Market reaction was immediate: Circle (NYSE: CRCL) shares at one point fell more than 17%, reflecting investor concern over whether a large industry-backed alliance could threaten USDC’s market position. On July 1, the stock briefly rebounded 4% intraday before closing down 1.09%.
In response, Circle founder and CEO Jeremy Allaire published a forceful defense of the company’s strategy and competitive position. His main message was straightforward: stablecoins are not ordinary fintech products. They are network businesses, more comparable to internet utility layers or public software protocols than to standalone payment tools. Because of that, he argued, the market tends to reward scale, integration, compliance depth, and liquidity concentration, making the category structurally closer to a winner-takes-most market than to an open field where many equivalent issuers can coexist with equal relevance.
Why Allaire says stablecoins are network businesses
Allaire’s first argument is that stablecoin networks derive value from integration density. A stablecoin becomes more useful as more applications, wallets, exchanges, payment providers, custodians, and developers connect to it. Every new integration increases utility not only for the new participant but for all existing participants, because interoperability, settlement reach, and user convenience all improve at the same time. This creates self-reinforcing network effects, where scale attracts more scale.
He said Circle has spent nearly a decade building this integration layer for USDC, and that the result is a network already connected to thousands of services. In practical terms, that means any new developer building on USDC can plug into an existing ecosystem of liquidity and compatibility rather than starting from zero. At the user level, the advantage is similarly compounding: the broader the network, the easier it becomes to move between products, venues, and jurisdictions without losing utility.
Allaire also emphasized that Circle has not relied only on issuance. It has invested in protocol-level software designed to extend the network itself. He specifically referenced CCTP and Gateway as examples of infrastructure that improves interoperability, security, and liquidity across markets. According to him, this software stack is now being extended into more chains, permissioned Layer 2 environments, and even government-built networks. The implication is clear: Circle wants USDC to be not just a token, but a programmable, globally portable settlement layer that can be embedded into many types of financial systems.
Liquidity as the real moat: primary access and secondary depth
Allaire’s second major point is that liquidity is foundational. In his framing, a stablecoin can only achieve true scale if it has both primary-market and secondary-market liquidity. Primary-market liquidity refers to direct banking access and redemption channels in major global financial centers. Secondary-market liquidity refers to broad trading and settlement access across exchanges, DeFi protocols, payment service providers, payment companies, and regional market infrastructure. If people cannot reliably enter and exit a stablecoin, it cannot function as a universal value-transfer instrument.
He said Circle has spent close to ten years building that liquidity network for USDC, embedding it across exchanges, DeFi venues, PSPs, payment firms, and regional trading platforms. Just as important, he argued, USDC liquidity is not concentrated in a single venue or a small number of order books. Instead, it is spread across dozens of platforms, which makes the asset more resilient, more usable, and more practical as a piece of financial infrastructure.
Allaire framed this as a sharp difference from most challenger stablecoins. In his telling, BTC, USDT, and USDC sit in the top tier of digital-asset liquidity globally. The nearest other dollar stablecoins, he said, are only around one-tenth the scale of USDC, and their usable liquidity is often clustered in one exchange or one localized market structure. From Circle’s perspective, that matters more than promotional circulation numbers, because broad liquidity is what determines whether a stablecoin can support payments, trading, treasury use, and cross-border movement at scale.
Regulatory integration and banking infrastructure as long-cycle advantages
The third pillar of Allaire’s case is regulation. He argued that stablecoin adoption in major jurisdictions increasingly depends on licensing, registration, banking access, reserve operations, treasury systems, and the ability to move funds through global markets nearly around the clock. These are not capabilities that can be assembled quickly, and they are especially difficult to build across multiple legal systems at once.
As an example, Allaire stated that USDC is currently the only major global stablecoin available across all of Europe or all of Japan. He presented this not as a branding achievement, but as the result of years of work obtaining permissions, aligning with local rules, and building the supporting global banking, reserve-management, treasury, and liquidity framework needed to operate reliably in those regions. As stablecoin policy frameworks continue to emerge around the world, Circle’s aim, he said, is to stay at the front of formal recognition, registration, licensing, and market acceptance in the jurisdictions that matter most.
That claim goes directly to Circle’s broader strategic narrative. The company wants the market to view USDC not simply as an issued digital dollar, but as trusted infrastructure. In Allaire’s framing, that trust comes from a combination of compliance, operational resilience, institutional connectivity, and continuous product investment. Those are expensive, time-intensive advantages, and he suggested they are far harder to replicate than headline product features or alliance announcements.
Artemis data and Circle’s view of actual stablecoin usage
To reinforce the idea that stablecoins naturally consolidate around a small number of leaders, Allaire cited data from third-party analytics firm Artemis. According to the figures he referenced, in Q1 2026 USDC processed nearly $30 trillion in on-chain transaction volume, accounting for 80% of all dollar stablecoin transaction activity across blockchains. USDT accounted for the remaining 20%, while all other dollar stablecoins combined accounted for 0%, meaning less than 0.5%.
That data point is central to Circle’s argument because it shifts the discussion from supply to usage. In other words, Allaire is arguing that circulation alone is not enough to demonstrate market relevance. A stablecoin may have some level of outstanding issuance, but if its activity is mostly driven by incentives or promotional programs rather than by organic settlement, trading, payment, and treasury demand, then it does not carry the same network value.
He suggested that many smaller stablecoins suffer precisely from that limitation. Without meaningful liquidity, broad integration, and reliable ingress and egress channels, they may circulate but not truly function as critical financial infrastructure. From Circle’s point of view, this is why real market leadership should be measured by transaction share, integration breadth, and liquidity distribution rather than by launch narratives alone.
Circle’s rebuttal to free redemption, revenue-sharing, and consortium governance
Allaire also addressed the view that OUSD may be structurally “better” than USDC in some respects, especially around free minting and redemption, economic sharing, and governance. On free redemption, he acknowledged that market participants are highly sensitive to costs, particularly payment companies that prefer minimal friction at entry and exit points. But he argued that the broader payments industry has always operated around small basis-point fees at network boundaries, and that promising unlimited free redemption sounds easier in theory than it is in live market conditions.
His concern is that the economics of liquidity provision and redemption infrastructure eventually impose real costs. In some market structures, stablecoins with weak redemption facilities and high fees can end up relying on better-capitalized, more liquid competitors as de facto exit rails. In that environment, a stablecoin offering universally free redemption may discover that it is subsidizing flows in a way that becomes difficult to sustain. Allaire said Circle addresses these issues through contractual and structured arrangements rather than blanket fee waivers, and he maintained that the company has already solved for this in practice.
He also described Circle’s partner strategy as intentionally expansive. Rather than trying to close the ecosystem, Circle is continuing to bring in exchanges, custodians, payment companies, and asset issuers through a growing set of commercial models. He referred to this as a “Big tent mentality,” meaning that Circle would rather enlarge the utility of the network for many participants than restrict access in pursuit of a narrower structure.
On consortium governance, however, his tone was much more skeptical. He argued that alliance-based products have a poor historical record when it comes to scaling, achieving product-market fit, and maintaining product agility. While financial consortia do exist in utility-like settings, he said they are often slow-moving, burdened by coordination problems, and weakened by inconsistent incentives across members. In many cases, the alliance itself ends up under-resourced because the participating firms prioritize their own interests over investment in the common platform.
Allaire added that Circle itself experimented with similar approaches in the early USDC period. Even with relatively few participants, he said, the company encountered substantial complexity and friction. In his experience, smaller and tighter strategic collaborations, led by product builders able to act independently, almost always outperform broad alliances. His implication was that many firms may join consortium efforts publicly, but when it comes time to make operational decisions for customers, they often choose the established market leader if that delivers better outcomes.
Coinbase, open cooperation, and Circle’s broader platform expansion
Another issue Allaire addressed was Circle’s relationship with Coinbase. Market participants have long viewed the partnership as central to USDC’s distribution and strategic relevance, so any sign of strain would be meaningful. Allaire said the stablecoin partnership with Coinbase remains as strong as ever and that both companies continue to see major opportunity in expanding the USDC network. This was an important reassurance in the context of OUSD’s emergence, because it signaled continuity rather than fragmentation within one of USDC’s most important commercial relationships.
He also stressed that Circle does not treat competition and cooperation as mutually exclusive. Even where Circle’s own products may overlap with those of partners, the company intends to keep supporting a broad set of infrastructure and platform services. He noted that many founding OUSD members already work closely with Circle and are expected to remain important partners and customers for USDC as well.
More broadly, Circle is extending its business beyond simple stablecoin issuance into a larger infrastructure stack. Allaire referenced products and systems including Arc, CCTP, CPN, StableFX, and Agent Stack. At the same time, Circle is expanding work with dozens of other stablecoin issuers, helping them issue via Arc, connect to Circle’s interoperability rails, gain wallet support, and use CPN and StableFX for settlement and foreign exchange options. That positioning suggests Circle wants to capture value not only from USDC itself, but from the underlying rails used by a wider stablecoin ecosystem.
Allaire closed on a formally open note, saying Circle remains strongly bullish on the growth of the stablecoin ecosystem and welcomes OUSD as a new entrant. But the broader message of his response was unmistakable. In Circle’s view, slogans such as free redemption, shared economics, or open consortium governance do not by themselves determine who wins the stablecoin market. The decisive factors remain network scale, liquidity depth, regulatory reach, and the willingness to invest for years in the software, banking, and operational infrastructure that makes a global digital dollar actually usable.