The consortium behind OpenUSD, supported by Stripe and Coinbase, threatens Circle's business model, but analysts warn that establishing a network is more complex than securing high-profile partners.
By Krisztian Sandor, Helene Braun|Edited by Aoyon AshrafUpdated Jun 30, 2026, 6:41 p.m. Published Jun 30, 2026, 6:39 p.m. 4 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Circle CEO Jeremy Allaire (Danny Nelson/CoinDesk)SummaryShow- Circle's stock fell sharply following the introduction of the Open Standard consortium and its Open USD stablecoin, which aims to compete with Circle’s USDC by redistributing reserve income to its partners.
- Analysts suggest the stock drop may be exaggerated, as past consortium-backed stablecoins, such as Paxos’ USDG, have struggled for market traction, and OUSD still has unresolved issues regarding its structure, incentives, and adoption.
- This situation heightens scrutiny of Circle's economic model and its collaboration with Coinbase, while also indicating a broader shift in stablecoin competition towards distribution platforms like exchanges and payment processors.
Circle shares (CRCL) plummeted on Tuesday after the unveiling of the Open USD stablecoin, which unsettled investors. However, analysts caution that it is premature to determine whether the consortium poses a significant threat to USDC.
The Open Standard consortium, which includes over 140 companies such as Stripe, Coinbase, Visa, Mastercard, and BlackRock, has drawn attention for targeting one of Circle's primary advantages: its established network of institutional partners. Some commentators have described it as an "existential threat" to Circle, whose business model depends heavily on the interest accrued from the assets backing USDC. In contrast, OUSD plans to share that yield with its partners rather than keep it for itself.
Rob Hadick, a general partner at Dragonfly venture capital, remarked to CoinDesk, "The marquee partner names clearly suggest a real threat to Circle's business," noting that Stripe's extensive range of financial products could provide the consortium with an advantage by enabling it to "uniquely undercut Circle's economics."
Yet, others are more reserved in their assessment for the time being.
"It has a strong line-up on paper, which will impact the near-term sentiment of CRCL until OUSD is launched later this year," stated Owen Lau, managing director at Clear Street.
He maintained, however, that Circle's 16% decline on Tuesday was excessive. "I think it is an overreaction," he conveyed to CoinDesk.
Circle selloff (TradingView)Lau pointed out Paxos' Global Dollar Network (USDG), another consortium-backed stablecoin that shares reserve income with its partners but has struggled to capture significant market share. Since its inception in late 2024, it has reached a supply of $3 billion, far behind USDC's $73 billion and USDT's $145 billion, as reported by CoinDesk data.
"The more significant question is how OUSD can persuade consumers and end users to adopt them," Lau stated. "We won't have definitive answers until it is fully launched and we can evaluate the market cap and usage."
Hadick also warned that forming an industry consortium is rarely a straightforward process. "Consortiums are hard and they break easily," he cautioned. "Incentives can be broad and often misaligned." He added that while the drop in Circle's stock seems justified, he does not anticipate a simple or easy path for Open Standard, predicting that scaling will be more challenging than expected.
Unanswered Questions Remain
Other analysts noted that the announcement left many critical questions unaddressed. Noelle Acheson, author of the Crypto Is Macro Now newsletter, acknowledged that Open Standard has gathered an impressive array of partners and is led by Zach Abrams, co-founder of Bridge, who is experienced in the field. However, she pointed out that the announcement lacks clarity on key issues such as ownership structure, the licensing framework for the issuer, the blockchains on which Open USD will operate, and the distribution of reserve income among partners.
Omid Malekan, an adjunct professor at Columbia Business School, criticized the announcement as reflecting the "logo spray and pray" phase of stablecoin adoption. He asserted, "Putting your name on a list is easy, but actually changing corporate behavior and business models is challenging." He emphasized that the crucial question is whether stablecoins can enhance the financial performance of participants.
Circle-Coinbase Dynamics
This announcement has also brought renewed attention to Circle's relationship with Coinbase. The two firms co-founded the Centre Consortium, which initiated the issuance of USDC and continues to share the economic benefits tied to the stablecoin’s reserve income under a commercial agreement that is reportedly due for renewal in August.
Omar Kanji, general partner at Dragonfly, suggested that the announcement makes a potential separation between Circle and Coinbase seem more plausible, although he ultimately anticipates that both companies will renew their agreement with adjusted terms while competing in certain areas.
Luca Prosperi, CEO of M0 Foundation, regards Open USD as indicative of a shift in the stablecoin market away from winner-takes-all dynamics. He described the consortium as "Global Dollar on Stripe's execution engine," arguing that "nothing changes for the long-term thesis."
Changing Landscape of Stablecoin Competition
The ongoing discourse highlights the need for investors to reassess their positions in the stablecoin sector. Jeff Dorman, CIO of investment firm Arca, argued that opportunities extend beyond issuers like Circle and Tether to encompass exchanges, payment companies, wallets, custodians, and blockchain networks that facilitate and settle digital currencies. As stablecoins become more integrated into mainstream finance, these distribution channels may ultimately emerge as the more significant beneficiaries. "The stablecoin opportunity extends far beyond Circle, Tether, or any single issuer," he told CoinDesk. "Investors often inquire about what the next trillion-dollar blockchain use case will be. Increasingly, the answer appears to be money itself, although finding the best pure play investment is challenging."
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