Circle shares drop more than 17% on Tuesday after a huge consortium of companies unveils a direct challenger to its USDC stablecoin. The stock falls to a four month low, closing near $63 after opening above $72.
More than 140 companies stand behind the new coin, called Open USD. Stripe, Coinbase, Mastercard, Visa and BlackRock feature among the launch partners driving the project forward.
The initiative comes from a new independent operator called Open Standard. It is led by Zach Abrams, who co-founded Bridge, the stablecoin infrastructure firm that Stripe bought in 2024.
Open USD breaks from how existing stablecoins operate today. Businesses will be able to mint and redeem tokens for free, without the volume caps that competitors typically impose.
The reserve income model marks the biggest shift. Partner companies will collect nearly all interest earned on reserves, rather than the issuer keeping that revenue alone.
Governance sits with a board drawn from partner companies instead of a single corporate parent. Organizers describe this structure as essential for winning broad adoption across the industry.
Abrams explained the reasoning behind the launch in a statement. “Existing stablecoins have great strengths, but to use them at scale, businesses need something that’s open, low-cost, high-throughput, broadly accessible, and aligned to their interests.”
Circle CEO Jeremy Allaire downplayed the threat in an X post following the announcement. “We welcome continued innovation and competition in the space and look forward to remaining laser-focused on building the best stablecoin infrastructure possible.”
Coinbase’s involvement drew particular attention given its existing ties to Circle. The two firms co-created the Centre Consortium behind USDC, with Circle paying Coinbase over $900 million in 2024 for distribution.
The backer list stretches well beyond the biggest names. BNY, Standard Chartered, DBS, Shopify, Google, IBM, Fireblocks, Anchorage Digital, Solana, Polygon and Ripple all joined as launch partners.
Some analysts questioned whether the market reaction went too far. Clear Street’s Owen Lau called the selloff an overreaction, pointing to a similar partner owned stablecoin that has only reached $3 billion in supply since 2024.
Open USD is expected to launch later this year. The stablecoin market has grown past $300 billion, with some projections putting it near $4 trillion by 2030.
