Open USD, developed by Open Standard, allows partners to retain reserve income and avoid minting fees, posing a challenge to Circle's USDC.
By Krisztian Sandor|Edited by Stephen Alpher Jun 30, 2026, 2:32 p.m. 3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Jeremy Allaire, Co-Founder, Chairman and CEO, Circle Speaks at Hong Kong Fintech Week in 2024 (HK Fintech Week)SummaryShow- Circle's stock tumbled by 8% following the announcement of Open USD by a consortium of over 140 companies.
- Key launch partners include Stripe, Coinbase, Mastercard, Visa, and BlackRock.
- The new stablecoin allows partners to keep reserve earnings, significantly impacting the economics of existing issuers.
Circle (CRCL) experienced an 8% decline in its shares during Tuesday morning trading after the introduction of Open USD, a new stablecoin backed by a consortium of prominent firms in payments, banking, and cryptocurrency.
This digital dollar, developed by Open Standard, features founding partners such as Stripe, Coinbase, Mastercard, Visa, and BlackRock, along with over 140 other businesses from various sectors.
The initiative is spearheaded by Zach Abrams, co-founder of Bridge, a stablecoin infrastructure company acquired by Stripe in 2024.
"While existing stablecoins possess notable advantages, businesses require solutions that are open, cost-effective, high-capacity, widely available, and in their best interest to operate at scale," Abrams stated.
This announcement follows earlier reports indicating that major firms like Stripe, Visa, and Mastercard were supporting a new stablecoin platform, with Coinbase also considering involvement.
Consortium for Stablecoins
The launch of Open USD coincides with the increasing integration of stablecoins into mainstream finance. Once primarily utilized by crypto traders, dollar-pegged tokens are now facilitating cross-border transactions, merchant payments, and corporate treasury functions. The stablecoin market has surpassed $300 billion, with Citi predicting it could grow to $4 trillion by 2030, drawing in banks, payment processors, and fintech companies eager to release their own digital currencies.
As more institutions adopt stablecoins, the competition is shifting from merely issuing tokens to controlling the foundational infrastructure and network.
Unlike most current stablecoins, Open USD will enable businesses to mint and redeem tokens without incurring fees while redistributing reserve income to participating partners, minus a management fee. Governance will be collaboratively managed among members instead of being centralized under one issuer.
This model addresses a key economic aspect of the existing stablecoin landscape. Companies like Circle generate income by investing the reserves backing their tokens in short-term U.S. Treasuries and keeping most of the interest earned. In contrast, Open USD plans to share that yield with participating businesses.
This approach is reminiscent of the Global Dollar Network (USDG), a stablecoin consortium led by Paxos that distributes reserve income to its participants. This network includes firms like Robinhood, Kraken, and Galaxy Digital and aims to promote broader adoption by aligning interests between the issuer and its distribution partners.
In Europe, a collective of banks and payment providers has launched Qivalis, an initiative aimed at developing a euro-based stablecoin as financial institutions strive to create shared digital payment systems.
The extensive support for Open USD signifies this trend. In addition to Stripe, Coinbase, Mastercard, and Visa, its 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 Increased Competition
This announcement highlights the evolving competitive landscape for Circle.
With a market capitalization of around $73 billion, USDC has established itself as the regulated stablecoin of choice for institutions, forming partnerships with banks, payment processors, and asset management firms while obtaining regulatory approvals in regions such as the U.S. and the EU.
In contrast, Tether's USDT, which boasts a circulation of approximately $145 billion, has gained its market position mainly through crypto trading and payments in emerging markets.
Open USD targets a different segment of Circle's strategy by offering banks, payment firms, and fintechs a share of the interest income generated from U.S. Treasuries held in reserve, a vital revenue source for Circle's operations.