Circle spent years turning USDC into the cleanest dollar token in crypto. Now a new consortium stablecoin could squeeze the part of the business that pays the bills.
- Open USD (OUSD) was unveiled on June 30 as a shared-economics stablecoin backed by more than 140 companies, according to the source material provided.
- The threat to Circle is economic, not cosmetic: OUSD is built to share reserve income instead of letting one issuer keep it.
- Circle still has real defenses in liquidity, trust, compliance, and the network effects USDC has already built.
- The real battle is for default status across payments, wallets, exchanges, and merchant rails.
The sharp part is not that another stablecoin exists. Crypto makes those by the bucket. The sharper part is that this one is designed to hit Circle where it actually earns money.
Circle’s business is heavily tied to the yield on the reserves backing USDC. Those reserves are held in short-term Treasuries and cash equivalents, and the interest is what makes the machine hum. With USDC circulation around $73 billion, that float has been generating several billion dollars a year and, by the provided figures, roughly 96% of company revenue.
That model gets a lot less comfortable when your own distribution partners decide they would rather keep a slice of the economics for themselves.
What OUSD is supposed to do
Open USD, or OUSD, is a new dollar stablecoin built around a consortium model. Instead of one issuer collecting the reserve income, the revenue is shared back to participating partners after a management fee. In plain English: if several big firms help distribute the token, they also want a cut of the spread.
That is the real threat here. Not “yet another stablecoin, ” but a stablecoin that can turn Circle’s reserve-yield model into someone else’s shared revenue stream.
The project was unveiled on June 30 and is tied to Open Standard, with Zach Abrams leading the effort. The source material describes the setup as free at the point of use, with no fees and no volume limits for minting and redemption.
Minting means creating the stablecoin. Redemption means swapping it back for dollars. If both happen cheaply and cleanly, users stop caring about the plumbing and start caring about what is already accepted, already integrated, and already the default.
Why investors reacted so fast
Circle’s stock sold off sharply after the OUSD announcement. The provided figures show Circle falling as much as 18% intraday and closing down 17.55% at $62.63, which was described as its worst day since March. The source also says CRCL was down nearly 40% on the month.
That kind of move makes sense if investors believe OUSD could pressure Circle’s margins and bargaining power. If partners can earn more by backing a rival stablecoin, Circle’s economics do not just get challenged, they get squeezed.
The company already faced pressure earlier in the year when a draft proposal threatened the yield model from the regulatory side. Now the competitive threat is coming from the other direction. One side can cap the business. The other can copy the business and offer a better deal to the people Circle depends on. Brutal stuff.
The awkward part: Circle’s allies are in the room
According to the material provided, OUSD is backed by more than 140 companies, including names such as Visa, Mastercard, Stripe, BlackRock, Google, and Coinbase. That matters because stablecoins are not won by vibes or white papers. They are won by distribution.
Coinbase is the especially awkward one. Circle and Coinbase once jointly governed USDC through the Centre consortium until 2023. Circle also paid Coinbase $908 million in a single recent year as a distribution fee for carrying USDC. That is not a small handshake. That is a very large bill for access to one of your most important channels.
If partners like Coinbase can help build a rival token that shares reserve economics more directly, Circle’s old moat starts looking less like a moat and more like a toll road that others want to reroute.
Why this is bigger than one company
OUSD is part of a much broader shift in stablecoins. The sector has moved well beyond the “small crypto side project” stage. The source material points to other shared-economics efforts such as the Paxos-led Global Dollar Network, which has included Robinhood, Kraken, and Galaxy since 2024. It also notes that European banks are building the euro-denominated Qivalis venture on similar logic.
The message is simple: institutions do not just want to distribute stablecoins anymore. They want a piece of the economics.
That shift became easier after the Regulatory Framework for Payment Stablecoins Under the GENIUS Act passed in 2025, creating a clearer U.S. framework for compliant dollar stablecoins. The law helps established issuers like Circle, but it also reduces the legal fog for large rivals that have the capital and distribution to launch under regulated terms.
Regulation does not always protect incumbents. Sometimes it just makes the race more professional.
Circle is not dead, though
It would be lazy to treat OUSD as a clean kill shot. Circle still has meaningful defenses.
First, USDC already has deep liquidity and broad acceptance across exchanges, wallets, DeFi apps, fintech products, and institutional rails. Stablecoins are sticky because defaults are sticky. If a protocol, merchant stack, or payment flow already quotes USDC, people usually do not switch unless the new option is clearly better.
Second, Circle has spent years building a reputation for compliance and reliability. That sounds boring, but boring is often exactly what wins in payments and treasury flows. Enterprise users do not usually wake up hoping for chaos.
Third, existing integrations are hard to unwind. Once a stablecoin is embedded in settlement systems, lending markets, wallets, and merchant rails, ripping it out is annoying, risky, and often not worth the trouble.
And fourth, the broader market is still growing. The source material says stablecoins circulate above $300 billion today, while Citi projects $4 trillion by 2030 and BNY sketches $1.5 trillion as a conservative case. Those are forecasts, not facts, but the direction is clear enough: the pie may get large enough that Circle can still grow in absolute terms even if its margins get thinner.
The real fight is for defaults
There is a line in the provided material that gets to the heart of this fight:
“A dollar token is a dollar token; what differs is where it is accepted, quoted, and defaulted.”
That is the whole game.
Users do not care about stablecoin branding decks. They care about what their exchange, wallet, payment stack, merchant platform, or DeFi protocol already supports. The winner is the token that becomes the default rail.
That is why Stripe matters so much here. The source material says Stripe processed $1.9 trillion in payments last year, and it has committed to making OUSD the base stablecoin across its commerce ecosystem. If that sticks, Circle will not just be competing with another token. It will be competing with a distribution machine.
Shopify, Mercado Pago, and other commerce platforms could become similar battlegrounds. So could software-driven payment systems, where autonomous agents make payments on behalf of users. In those flows, defaults matter even more because software follows the easiest path, not the most poetic one.
What matters next
The key question is not whether OUSD exists. It does. The question is whether it becomes operationally sticky enough to matter.
Consortium projects can look powerful on paper and still get jammed up by governance, incentives, and the classic “who is actually in charge?” problem. Coordinating more than 140 companies sounds impressive until you remember that every one of them has its own legal team, product roadmap, and agenda.
Still, if a shared-economics stablecoin wins default placement in enough payments and commerce flows, Circle’s business gets hit in a real way. Not because USDC disappears, but because the easy rent-collection era becomes much harder to defend.
Circle may respond by sharing more economics, tightening partnerships, or leaning harder into its own infrastructure plans. But every response has a cost. Give away too much yield and the business gets thinner. Refuse to share and partners may drift toward the better-paying option. Lovely little dilemma.
Key questions and takeaways
-
Is OUSD a real threat to Circle?
Yes. It is built around shared reserve economics, which goes straight at the part of Circle’s business model that matters most. -
Why does Circle care so much about reserve yield?
Because interest on the reserves backing USDC is the company’s main revenue engine. If that income gets shared away, the economics get squeezed fast. -
Does Circle still have an edge?
Yes. USDC has liquidity, trust, compliance credibility, and deep integrations that are hard to replace overnight. -
Why does Coinbase being involved matter?
Because it shows Circle’s own distribution network can become competitive pressure. In stablecoins, control of the channel is often more important than control of the logo. -
Will regulation save Circle?
Not by itself. The GENIUS Act gives compliant issuers more clarity, but it also lowers the barrier for well-capitalized rivals to launch under clearer rules. -
Could Circle still grow if margins compress?
Yes. The stablecoin market is still expanding, so Circle can grow in absolute terms even if its share of the economics gets thinner.
The cleanest read here is not that Circle has been knocked out. It has not. The cleaner read is that stablecoins are becoming a real economic war, and the old model of one issuer quietly collecting the spread while everyone else does the hard work is getting a lot harder to defend.
The era of the stablecoin issuer as a standalone toll collector may be under pressure. About time, honestly.
Further reading
A few useful context pieces on Circle, USDC, and the growing stablecoin knife fight:
- Circles partners just built its replacement
- USDC and EURC Examination Reports Overview
- Open USD Stablecoin Launch Challenges Tether and Circle
- More than 140 companies joined a consortium called Open
- Circle: A Comprehensive Analysis of the Compliant
- Kyriba Integrates USDC and Circle as Stablecoins Move Into Corporate Treasury Management
- Ripple’s $20B Bid for Circle: Shaping the Future of USDC
- Dubai Approves Circle’s USDC and EURC: A Milestone for
