Key Takeaways
- Shares of Circle (CRCL) plunged over 13% to approximately $65, marking a four-month low following the announcement of a competing stablecoin.
- More than 140 companies—including Visa, Stripe, Mastercard, BlackRock, and Coinbase—unveiled Open USD, a new consortium-backed stablecoin.
- The Open USD initiative is managed by Open Standard, with leadership from Zach Abrams, Bridge’s co-founder (Bridge was purchased by Stripe in 2024).
- Open USD differentiates itself by offering free minting and redemption while distributing reserve interest earnings among consortium members.
- Circle’s CEO Jeremy Allaire dismissed concerns, emphasizing USDC’s market leadership and expressing openness to industry competition.
Circle Internet Group experienced a significant downturn on Tuesday. The stock tumbled as much as 14% during intraday trading before closing down roughly 13% at around $65—the weakest price point since the end of February.
The sharp decline came after an alliance of over 140 firms revealed plans to introduce a rival stablecoin. The digital asset, dubbed Open USD, represents a direct challenge to Circle’s flagship USDC token.
Coinbase shares also took a hit, falling approximately 6% to $142.37. The connection is significant given that Coinbase originally partnered with Circle to create USDC and continues to share revenue generated by the stablecoin.
The Consortium Behind Open USD
The roster of supporting companies is extensive and features several industry titans. Founding partners include payment processors Visa and Mastercard, fintech giant Stripe, asset manager BlackRock, and cryptocurrency exchange Coinbase. Major financial institutions such as BNY Mellon, Standard Chartered, and U.S. Bank have also joined.
Technology companies are represented as well. Google and IBM are among the participants, alongside blockchain-focused entities including Ripple, Solana, Polygon, and Aave.
Open Standard, an independent organization, oversees the initiative. Zach Abrams serves as the project leader—he previously co-founded Bridge, a stablecoin infrastructure company that Stripe acquired in 2024.
Abrams positioned the venture as addressing industry gaps. He argued that while current stablecoins have merits, the market requires a solution that’s transparent, cost-efficient, and structured to benefit businesses operating at scale.
Industry observers weren’t entirely caught off guard. Earlier this month, CoinDesk published a report revealing that Stripe, Visa, and Mastercard were developing a competing stablecoin platform, with Coinbase potentially joining the effort.
Open USD’s Distinguishing Features Versus USDC
The economic model presents the most significant contrast to Circle’s approach. Open USD will allow participating businesses to mint and redeem tokens without transaction fees.
The handling of reserve income marks another crucial difference. Rather than concentrating interest earnings from reserve assets with a single entity, Open USD intends to distribute yield among consortium members after operational expenses.
This arrangement directly challenges Circle’s revenue stream. Circle generates profit by investing USDC reserves in short-duration Treasury securities and retaining the majority of interest income—precisely the model Open USD aims to disrupt.
Governance will be distributed among participants instead of centralized with one issuer. This approach resembles USDG, another consortium-backed stablecoin supported by Paxos, Robinhood, Kraken, and Galaxy Digital.
USDC maintains approximately $73.6 billion in total circulation, positioning it as the dominant U.S.-originated stablecoin. While Tether’s USDT leads globally with around $145 billion outstanding, it primarily serves cryptocurrency trading and developing markets.
For Coinbase, the implications are substantial. USDC-related revenue accounted for 44% of Coinbase’s subscription and services division during the first quarter.
On Tuesday, Circle CEO Jeremy Allaire took to X to defend his company’s position, declaring USDC “the most trusted, widely adopted, institutional-ready stablecoin in the world.” He noted that Circle works with thousands of institutional partners.
A Coinbase representative echoed optimism, suggesting that additional stablecoin issuers and applications expand the overall market, while emphasizing that USDC continues to be fundamental to their platform.
According to Open Standard’s public statement, Open USD is scheduled to debut later this year.
