Circle shares fall 8% as Stripe, Coinbase back Open USD stablecoin
In brief
- Circle (CRCL) shares fell 8% Tuesday after Open Standard announced Open USD stablecoin.
- Open USD enables fee-free minting and redemption with reserve income shared among partners.
- Stablecoin market exceeds $300 billion; Citi projects $4 trillion growth by 2030.
- Launch partners include Stripe, Coinbase, Mastercard, Visa, BlackRock, BNY, Google, IBM and others.
Open USD's competitive model
Open USD allows businesses to mint and redeem tokens without fees while returning reserve income to participating partners. This contrasts sharply with how Circle generates revenue: the company invests reserves backing USDC in short-term U.S. Treasuries and retains most of the interest generated.
Governance will also be shared among members rather than controlled by a single issuer. The approach resembles the Global Dollar Network (USDG), a stablecoin consortium led by Paxos that shares reserve income with participating firms and is backed by companies including Robinhood, Kraken and Galaxy Digital.
The initiative is led by Zach Abrams, co-founder of stablecoin infrastructure firm Bridge, which Stripe acquired in 2024.
Market context and competitive landscape
USDC, with a market capitalization of roughly $73 billion, has positioned itself as the regulated stablecoin for institutional use. Market leader Tether's USDT, with about $145 billion in circulation, has built its dominance largely through crypto trading platforms.
The stablecoin market has grown to more than $300 billion and Citi projected it to grow to $4 trillion by 2030. Launch partners for Open USD include BNY, Standard Chartered, DBS, U.S. Bank, Shopify, Google, IBM, Mercado Pago, Fireblocks, Anchorage Digital, MetaMask, Aave, Solana, Polygon and Ripple.
"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." — Zach Abrams, leader of Open USD initiative
Frequently asked questions
What makes Open USD different from USDC?
Open USD eliminates minting fees for businesses and returns reserve income to participating partners, unlike USDC where Circle retains most interest from Treasury investments. Open USD also uses shared governance rather than single-issuer control.
Who backs Open USD?
Founding partners include Stripe, Coinbase, Mastercard, Visa and BlackRock. Launch partners span banking, fintech and blockchain firms: BNY, Standard Chartered, DBS, U.S. Bank, Shopify, Google, IBM, Mercado Pago, Fireblocks, Anchorage Digital, MetaMask, Aave, Solana, Polygon and Ripple.
How large is the stablecoin market?
The stablecoin market has grown to more than $300 billion. Citi projects it will reach $4 trillion by 2030. USDT leads with approximately $145 billion in circulation, followed by USDC at roughly $73 billion.
