140+ Firms Launch Open USD to Rival Circle's USDC
Stripe, Coinbase, BlackRock, and 140+ companies have launched a new stablecoin standard that shares yield with partners, sending Circle's stock into a tailspin.
Key takeaways
- Open USD is a shared infrastructure play. Its value proposition is that no single company controls the network or captures all the yield.
- The yield-sharing model inverts the traditional stablecoin business. Instead of the issuer keeping reserve income, Open USD redistributes it to distribution partners.
- Coinbase's participation is a structural conflict of interest with its existing Circle deal. It signals that major distributors are positioning for governance in the next stablecoin era rather than remaining fee-dependent middlemen.
A coalition of more than 140 companies, including Stripe, Coinbase, Visa, Mastercard, BlackRock, BNY, Google, Shopify, Ripple, Aave, Solana, and Polygon, announced Tuesday the formation of Open Standard, an independent organization building a new stablecoin called Open USD (OUSD). The move immediately rattled markets, with shares of Circle, the issuer of USDC, dropping as much as 17% on the day.
What Open Standard Is Actually Building
Open Standard positions itself as neutral infrastructure. The organization's stated goal is to create a shared digital payments layer that no single company controls – a deliberate contrast to the current market structure, where Circle and Tether each capture the vast majority of yield generated from their reserve assets.
The project is led by Zach Abrams, co-founder of Bridge – the stablecoin infrastructure startup acquired by Stripe in 2024 – lending it immediate credibility among fintech operators.
The terms of OUSD are structured to be unusually partner-friendly. There are no issuance fees, no redemption fees, and no volume caps.
More significantly, the majority of interest earned on OUSD's reserve assets is distributed back to the ecosystem's participants, including the businesses, wallets, and payment platforms that actually put the stablecoin to work, rather than retained by the issuing entity.
This is a direct challenge to how Circle and Tether make money. Both issuers currently invest the dollars backing their coins in U.S. Treasuries and money market funds, keeping all of the interest virtually. As interest rates remain elevated, that income has become substantial. Circle reported hundreds of millions in reserve income in recent years.
Why Coinbase's Involvement Changes the Calculus
Perhaps the most consequential name on the coalition's founding list is Coinbase.
Coinbase is currently Circle's largest distribution partner for USDC, earning an estimated $908 million annually from a revenue-sharing agreement tied to USDC held on its platform. That deal, which comes up for renewal in August 2026, has been one of the more lucrative arrangements in the stablecoin ecosystem.
By joining Open Standard, Coinbase is signaling that it sees more long-term value in having a seat at the governance table of a new open standard than in continuing as a distribution intermediary earning fees from a closed one.
Analysts have differing reads on what this means for the Circle–Coinbase relationship.
- Some view the move as a negotiating tactic ahead of the August renewal, designed to extract better terms.
- Others argue it reflects a more fundamental strategic reorientation that Coinbase would rather help set the rules for the next generation of stablecoin infrastructure than remain dependent on a single bilateral deal.
Read more: CLARITY Act Crisis: Coinbase and the $6.6T Risk
Circle's Response – and What the Markets Said
Circle CEO Jeremy Allaire moved quickly to address investor concerns following the announcement. Allaire affirmed that USDC remains the most trusted and institutionally adopted stablecoin on the market, and framed the announcement as a sign of healthy competition validating the broader stablecoin category.
The market was less reassured.
Circle's stock (CRCL) fell to its lowest level since late February, down approximately 39–55% over the prior month depending on the reference point, as investors priced in increased competition for the USDC revenue model.
Analysts remain divided.
- Some describe Open USD as an "existential threat" to Circle's core business, noting that if major distribution partners migrate to a yield-sharing model, the logic of concentrating reserve income at the issuer level breaks down.
- Others are more skeptical of the coalition's execution risk, arguing that assembling 140 logos for a press announcement is considerably easier than building a network that functions at scale.
Coordinating across competing financial institutions, each with their own compliance requirements, technology stacks, and competitive interests, is a non-trivial engineering and governance challenge.
The Circle–Coinbase distribution agreement, if renewed, would also retain significant value regardless of OUSD's progress. Stablecoin ecosystems have historically supported multiple concurrent standards, and USDC's existing integrations across DeFi protocols, institutional custody providers, and regulated markets represent a moat that cannot be replicated overnight.
What Comes Next
Open Standard has not released a detailed technical roadmap, a launch timeline for OUSD, or specifics on governance structure – all of which will be critical to evaluating whether the coalition translates into a functional product.
The key metrics to watch in the coming months are:
- whether Coinbase publicly formalizes its OUSD commitment before the August USDC contract renewal,
- whether OUSD achieves meaningful integration on major DeFi protocols and payment rails,
- and whether any of the coalition's anchor institutions, including Visa, Mastercard, and BlackRock, move reserves or settlement activity onto OUSD infrastructure.
For now, the announcement has reframed the competitive landscape in stablecoins from a two-player market between Circle and Tether into something more open and more uncertain.
Sources
- Unchained – Coinbase, Visa, Stripe and More Back New Open USD Stablecoin in Challenge to Circle and Tether https://unchainedcrypto.com/coinbase-visa-stripe-and-more-back-new-open-usd-stablecoin-in-challenge-to-circle-and-tether/
- CoinDesk – Circle Slides as Stripe, Coinbase and BlackRock Back Rival Stablecoin Network https://www.coindesk.com/business/2026/06/30/circle-slides-8-as-stripe-coinbase-and-blackrock-back-rival-stablecoin-network
- Invezz – Circle Stock Slides as Open USD Stablecoin Challenges USDC Dominance https://invezz.com/news/2026/06/30/circle-stock-slides-as-open-usd-stablecoin-challenges-usdc-dominance/
- Yahoo Finance – Here's Why Wall Street and Big Tech Are Uniting Behind Open USD https://finance.yahoo.com/markets/crypto/articles/heres-why-wall-street-big-162042813.html
FAQs
Most stablecoins are issued and controlled by a single company that keeps the yield from reserve assets. Open USD is designed as shared infrastructure where no single entity controls the network, and where the interest earned on reserves is redistributed to the businesses that use and distribute the stablecoin.
