Coinbase, BlackRock, Visa Back Open USD Stablecoin as Circle Stock Tumbles
In brief
- 140+ companies including Coinbase, Visa, Mastercard, and BlackRock formed coalition to launch Open USD stablecoin
- Open USD led by Zach Abrams, founder of Stripe-acquired Bridge, challenges Circle's USDC dominance
- Circle stock fell 16% on announcement day to $63.99, extending monthly decline to 39%
A Broader Coalition Model
Open USD allows businesses to mint and redeem the stablecoin for free with no volume caps, a structural difference from existing offerings. Crucially, governance will sit with a board drawn from Open USD's partner companies rather than a single corporate parent, and partners, rather than the issuer alone, will collect the earnings on reserves, minus a management fee.
This model distributes control and profit-sharing across the coalition. It's a departure from how Circle operates USDC. Zach Abrams, the founding CEO of Open Standard, framed the rationale in simple terms: existing stablecoins have strengths, but they lack what businesses need at scale.
"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, founding CEO of Open Standard
Circle's Competitive Squeeze
The coalition's reach is substantial. The backer list spans payments giants such as Visa, Mastercard, and American Express, banks including BlackRock, BNY, and Standard Chartered, tech firms such as Google and Shopify, and crypto players like Coinbase and Ripple.
Coinbase's participation stings most for Circle. Coinbase is a key ally of Circle, but has also thrown its weight behind Open USD. The defection signals that even close partners see value in an alternative architecture.
Circle's stock reflected the market's concern. The news appears to have rocked the stock price of USDC stablecoin issuer Circle (CRCL), with shares falling nearly 16% on announcement day. That's pushed the firm's plunge to 39% in the last month.
Market Expansion Ahead
Open USD is expected to go live later this year. The broader stablecoin opportunity remains substantial. BNY projected the broader stablecoin market could swell to $1.5 trillion by 2030.
BlackRock's Samara Cohen offered cautious optimism. She called Open USD "a constructive step toward giving businesses more choice," signaling institutional appetite for competition in the stablecoin space. If Open USD captures even a fraction of that projected growth, Circle's near-term pressures could intensify.
Frequently asked questions
What is Open USD and how does it differ from USDC?
Open USD is a new stablecoin launched by a coalition of 140+ companies including Coinbase, Visa, BlackRock, and Stripe. Unlike USDC (issued solely by Circle), Open USD allows free minting and redemption with no volume caps, distributes governance across partner companies via a board, and shares earnings on reserves among partners rather than a single issuer.
Why did Circle's stock fall on the Open USD announcement?
Circle's stock dropped 16% because Open USD represents direct competition to USDC, Circle's flagship product. The announcement signals that major partners—including Coinbase, a key Circle ally—prefer an open, coalition-based model over Circle's centralized structure, raising concerns about USDC's market position.
When will Open USD launch?
Open USD is expected to go live later in 2025. The stablecoin will be governed by Open Standard, led by founding CEO Zach Abrams, who previously founded the Stripe-acquired stablecoin company Bridge.
