Key Takeaways
- Circle (CRCL) shares plummeted over 13% to approximately $65, reaching the lowest point in four months following the competitive stablecoin announcement.
- More than 140 major corporations, including Visa, Stripe, Mastercard, BlackRock and Coinbase, revealed Open USD, a new stablecoin initiative.
- Open Standard oversees Open USD operations, with leadership from Zach Abrams, Bridge co-founder whose company was acquired by Stripe in 2024.
- Open USD distinguishes itself from Circle’s USDC by offering free minting and redemption services plus distributing reserve earnings to consortium members.
- Circle’s CEO Jeremy Allaire dismissed concerns, asserting USDC maintains its position as the leading trusted stablecoin while embracing competitive market dynamics.
Shares of Circle Internet Group experienced significant turbulence Tuesday. The stock plummeted as much as 14% during intraday trading before closing approximately 13% lower around $65, marking the weakest performance since the final days of February.
The sharp decline came after more than 140 major corporations unveiled plans for a competitive stablecoin venture. Dubbed Open USD, the new digital token is positioned as a direct challenger to Circle’s market-leading USDC.
Coinbase experienced collateral damage as well, with shares declining roughly 6% to $142.37. The connection is significant since Coinbase partnered with Circle to create USDC and continues to share revenue generated from the stablecoin.
The Power Players Behind Open USD
The consortium boasts an impressive roster of founding partners. Major payment processors Visa, Mastercard and Stripe join forces with investment giant BlackRock and crypto exchange Coinbase, alongside traditional banking institutions like BNY, Standard Chartered and U.S. Bank.
Technology sector representation includes prominent names. Google and IBM have committed to the initiative, joined by blockchain-native companies including Ripple, Solana, Polygon and Aave.
Open Standard, an independent organization, manages the project’s operations. Zach Abrams serves as the leader, bringing credentials as Bridge co-founder—a stablecoin infrastructure company that Stripe purchased in 2024.
Abrams positioned the venture around accessibility and economics. He emphasized that while current stablecoins possess merits, the market demands something open, economically efficient and structured to benefit partners operating at significant scale.
Industry observers weren’t entirely caught off guard. CoinDesk reported earlier in the month that Stripe, Visa and Mastercard were developing a competing stablecoin infrastructure, with Coinbase potentially planning participation.
What Sets Open USD Apart From USDC
The operational framework presents the most significant challenge to Circle’s revenue model. Open USD will enable businesses to create and redeem tokens without transaction fees.
The reserve interest distribution model creates another point of differentiation. Rather than concentrating interest income from reserves with a single entity, Open USD intends to distribute yields among participating partners after operational expenses.
This directly challenges Circle’s core revenue stream. Circle generates profits by investing USDC reserves in short-duration Treasury securities and retaining the majority of interest earnings—precisely the model Open USD aims to disrupt.
Governance structure will also be democratized across members instead of consolidated under one issuer’s control. This approach resembles USDG, another consortium-backed stablecoin supported by Paxos, Robinhood, Kraken and Galaxy Digital.
USDC maintains approximately $73.6 billion in circulation, establishing it as the dominant U.S.-domiciled stablecoin. Tether’s USDT surpasses it globally with around $145 billion in supply, though it focuses more heavily on cryptocurrency trading and developing market applications.
For Coinbase, the implications carry substantial weight. USDC-related revenue accounted for 44% of Coinbase’s subscription and services division during the first quarter.
Circle’s CEO Jeremy Allaire took to X Tuesday, characterizing USDC as “the most trusted, widely adopted, institutional-ready stablecoin in the world.” He emphasized Circle’s partnerships with thousands of institutional clients.
A Coinbase representative echoed this sentiment, suggesting that additional stablecoin issuers and applications ultimately expand the total addressable market for stablecoins, while affirming that USDC remains central to its platform strategy.
Open Standard’s announcement indicates Open USD will debut later in the current year.
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