Circle shares sank 16% on Tuesday after the launch announcement for the OpenUSD stablecoin network sparked concern that USDC could face a new kind of competitive pressure. The Open Standard consortium says it is backed by more than 140 companies, including Stripe, Coinbase, Visa, Mastercard and BlackRock. What caught investors off guard was not just the partner list, but the business model: OpenUSD plans to share reserve yield with partners instead of keeping that income at the issuer level, which goes straight at one of Circle’s main revenue engines.
Dragonfly general partner Rob Hadick told CoinDesk that the marquee names point to a genuine threat to Circle’s business. He argued that Stripe’s broad financial product suite could give the consortium an unusual ability to undercut Circle economically. Even so, not everyone viewed the selloff the same way. Clear Street managing director Owen Lau said the announcement could weigh on near-term sentiment around Circle until OpenUSD launches later this year, but he also described the market reaction as excessive.
A partner-driven model targets Circle’s core economics
Circle’s model depends heavily on retaining interest earned on the assets backing USDC. OpenUSD is pitching a different structure, one designed to hand that yield to distribution partners. That makes the consortium look attractive on paper to payment firms, financial platforms and other institutions that want direct economic participation instead of a supporting role.
Still, Hadick warned that a large consortium is difficult to build and even harder to hold together. Incentives inside these groups are often broad and misaligned, he said, which means the path from announcement to real scale can be messy. In his view, the decline in Circle’s stock may be understandable, but Open Standard is unlikely to have an easy route to adoption.
Past examples show revenue-sharing is not enough by itself
Lau pointed to Paxos’ Global Dollar Network, or USDG, as a useful comparison. That network also shares reserve income with partners, yet it has not translated that structure into dominant market share. Since launching in late 2024, USDG has reached a supply of $3 billion. That remains far below USDC at $73 billion and USDT at $145 billion, according to CoinDesk data.
For Lau, the central issue is not whether OpenUSD can assemble logos, but whether it can persuade consumers and end users to actually adopt the product. Until the stablecoin is fully launched, the market has little hard evidence on usage or capitalization. That leaves a large gap between investor fear and measurable traction.
Key structural details are still missing
Several analysts also said the Open Standard announcement answered less than it raised. Noelle Acheson, author of the Crypto Is Macro Now newsletter, said the consortium has an impressive line-up and is being led by Bridge co-founder Zach Abrams, someone she said clearly understands the market. Her concern was the lack of specificity in the release.
Among the unresolved questions she highlighted: who exactly owns Open Standard, what licensing framework the issuer will operate under, which blockchains OpenUSD will launch on, and how reserve income will be divided across partners. Those are not minor implementation details. They shape compliance, distribution, liquidity and long-term incentives.
Omid Malekan, an adjunct professor at Columbia Business School, argued on X that the stablecoin sector is still in a “logo spray and pray” phase. Getting companies to put their names on a list is easy, he wrote. Changing business behavior and business models is much harder. His test is simple: can stablecoins improve the bottom line for participants?
The OpenUSD launch puts Coinbase and Circle back in focus
The announcement also renewed attention on the relationship between Circle and Coinbase. The two firms jointly created the Centre Consortium that launched USDC, and they still share economics tied to reserve income through a commercial agreement. That deal is reportedly due for renewal in August.
Dragonfly general partner Omar Kanji said the emergence of OpenUSD makes a future split between Coinbase and Circle look somewhat more plausible. Even so, he still expects the two companies to renew their agreement with revised economics while continuing to compete in certain areas. Luca Prosperi, CEO of M0 Foundation, took a broader view and said Open USD is another sign that the stablecoin market is moving away from winner-take-all dynamics.