Shares of Circle (CRCL) plunged sharply on Tuesday, losing more than 17%. The reason was the announcement of Open USD—a new stablecoin that the market immediately saw as a potential competitor to USDC.
The project is being launched by Open Standard. Major players from payments, banking, fintech, and crypto have gathered around the company. Among them are Stripe, Coinbase, Mastercard, Visa, BlackRock, and more than 140 participants.
Open USD is led by Zac Abrams, co-founder of Bridge. This company worked on infrastructure for stablecoins, and in 2024 it was acquired by Stripe.
Abrams believes that existing stablecoins have already proven their usefulness, but businesses need a more convenient tool for large-scale use. It should be open, fast, low-cost, and take into account the interests of companies.
The announcement came shortly after a publication stating that Stripe, Visa, and Mastercard support the creation of a new platform for stablecoins.
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After the news, Circle shares closed below $63. This is the lowest since the end of February. Since mid-May, the company’s shares have already lost about 55%.
Consortium for a New Generation of Stablecoins
Stablecoins are increasingly moving beyond crypto exchanges. They are now used not only by traders but also by companies for international transfers, settlements with partners, and reserve management.
The market has grown above $300 billion. Citi believes that by 2030 it could reach $4 trillion. That’s why banks, payment companies, and fintech projects are increasingly trying to secure a place in this space.
But competition is gradually changing. Now it’s important not only to issue a token and achieve its adoption. Infrastructure is becoming increasingly important: who manages the network, who processes payments, and who receives income from reserves.
Open USD is betting precisely on this. Partners will be able to issue and redeem tokens without fees, and income from reserves will be distributed among network participants. Management will also not be concentrated with a single issuer.
For the market, this is a notable difference from the usual scheme. Circle and other issuers earn on reserves by placing them in short-term US Treasury bonds and keeping most of the interest income for themselves. Open USD offers to share this profit with partners.
A similar approach is already used by Global Dollar Network (USDG), a consortium of Paxos. There, income from reserves is also distributed among participants. The project includes Robinhood, Kraken, and Galaxy Digital. This model makes promoting the stablecoin more profitable for partners.
Similar initiatives are also emerging in Europe. A group of banks and payment providers launched Qivalis—a stablecoin project pegged to the euro. Financial companies are increasingly looking to build shared infrastructure for digital payments, rather than depend on a single issuer.
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The composition of Open USD participants shows that the project is aimed at more than just launching another stablecoin. In addition to Stripe, Coinbase, Mastercard, and Visa, it also includes BNY, Standard Chartered, DBS, U.S. Bank, Shopify, Google, IBM, Mercado Pago, Fireblocks, Anchorage Digital, MetaMask, Aave, Solana, Polygon, and Ripple.
Circle Gets a New Competitor
For Circle, the launch of Open USD was an unpleasant signal. The stablecoin market continues to grow, but competing in it is becoming more difficult.
USDC remains one of the largest regulated stablecoins. Its capitalization is about $73 billion. Circle promotes it as a tool for institutional clients, works with banks, payment services, and asset managers, and also receives approvals in the US, the European Union, and other regions.
Tether took a different path. USDT with a volume of about $145 billion has become the main stablecoin for crypto trading and payments in emerging markets.
Open USD targets another part of Circle‘s model. It offers banks, fintech companies, and payment providers not just to use the stablecoin, but to receive a share of the income from US Treasury bond reserves. For issuers, this is one of the main sources of revenue.
Circle CEO Jeremy Allaire tried to smooth the market’s reaction. On X, he wrote that stablecoins remain one of the world’s biggest opportunities because the internet is changing the way money is stored and transferred.
He added that Circle welcomes competition and new developments in the industry. According to Allaire, the company will continue to develop infrastructure for stablecoins and work with clients and partners.
According to market participants, further development of such projects could seriously change the balance of power in the digital asset industry.
