Visa, Mastercard, Coinbase back Open USD stablecoin
In brief
- Open USD secured 140+ partners: Visa, Mastercard, Coinbase, Aave, MetaMask
- Free unlimited minting and redemption with reserve earnings shared among partners
- Open USD targets USDC's institutional DeFi dominance after years of market leadership
- Citi forecasts stablecoins reach $1.9T–$4T by 2030 depending on adoption scenario
- Circle's USDC faces competitive pressure from yield-bearing alternatives and partner incentives
The USDC Challenger
USDC became the default dollar for institutional DeFi trading, lending, and settlement over several years. Crypto users built its liquidity, volume, and habit formation. But the economic upside flowed to Circle, Coinbase, and their distribution partners. Open USD pushes that contest into a new phase, fought over incentives: who gets paid to hold, route, and lend the next digital dollar.
Open Standard's partner roster reflects serious institutional interest. The list includes wallets, exchanges, and DeFi protocols such as Aave, Morpho, MetaMask, and Trust Wallet. Plasma, one of the planned launch networks, already markets itself around stablecoin spending, saving, and earning through Plasma One, which offers instant transfers, global spending, and cashback.
Open USD is planned to launch with native support on Plasma and Tempo later in the year. That timing matters. Total stablecoin supply sits at nearly $312 billion, with USDT at about $184.6 billion and USDC at around $73.9 billion. Citi has raised its 2030 stablecoin forecast to $1.9 trillion in its base case and $4 trillion in its bull case.
The Yield Arbitrage
Open Standard's model hinges on reserve earnings. At current Treasury yields, every $1 billion of Open USD in circulation would generate about $37 million a year in gross reserve income before fees and costs. That pool gets split among partners. Circle's first-quarter 2026 results show $653 million in reserve income against $407 million in distribution, transaction, and other costs, proving the model works at scale.
The regulatory backdrop matters too. The GENIUS Act bars stablecoin issuers from paying interest directly to holders. That constraint hasn't stopped Circle. Circle shares reserve-related income directly with Coinbase to keep USDC liquid and widely used. Coinbase already pays rewards on USDC balances. PayPal pays them on PYUSD, a structure banks have criticized as a workaround that pulls deposits out of the regulated banking system.
Market Reaction
Circle's market reaction was swift. Circle shares fell as much as 17% intraday on the day of the announcement, touching a low near $63. Investors read the Open USD launch as a direct threat to USDC's moat. Whether that moat holds depends on whether institutions value the simplicity of a single stablecoin over the incentive upside of a partner-led alternative.
