Circle Stock Falls as Rivals Back Open Stablecoin

Circle Internet Group (CRCL), issuer of the USDC stablecoin, saw its shares drop nearly 16% to $63.99 after a coalition of more than 140 companies, including Coinbase, Visa, Mastercard, Stripe and BlackRock, announced a rival stablecoin called Open USD (OUSD) designed to strip issuer economics out of the payments layer.

At a Glance

• Circle shares fell about 16% on the day to $63.99, extending a 39% decline over the past month, per Yahoo Finance
• Open USD was unveiled by a new independent operator, Open Standard, led by founding CEO Zach Abrams
• More than 140 companies back the project, including Coinbase, Visa, Mastercard, American Express, BlackRock, BNY, Standard Chartered, Google, Shopify and Ripple
• Minting and redemption will be free with no volume caps, and reserve interest will flow to partners rather than a single issuer
• Open USD is targeted to launch later this year, with BNY projecting the stablecoin market could reach $1.5 trillion by 2030

Why Circle's Stock Took the Hit

Circle's business model rests on capturing the yield generated by USDC's reserves, largely short duration Treasuries, and distributing a portion of that to partners like Coinbase under existing revenue sharing deals. Open USD directly attacks that structure. Under the new model, partner companies rather than the issuer collect reserve earnings, minus a management fee, and businesses can mint or redeem tokens at scale without the fees that have become a standard cost of doing business with incumbent stablecoin issuers.

The market reaction reflects a straightforward repricing of competitive risk. Coinbase, which holds an equity stake in Circle and shares USDC reserve revenue with it, is simultaneously listed among Open USD's backers. That dual position signals that even Circle's closest commercial ally sees enough strategic value in a neutral, multi issuer stablecoin standard to hedge its exposure. For a company whose valuation depends heavily on USDC's growth trajectory and its ability to retain reserve yield, a credible, well capitalized alternative changes the calculus materially.

The Structural Pitch Behind Open USD

Open Standard, the newly formed operator running the project, is positioning Open USD as infrastructure rather than a product tied to any single balance sheet. Zach Abrams, who previously founded Bridge before its acquisition by Stripe, framed the effort as a response to three recurring complaints about the stablecoin sector: minting and redemption costs that scale poorly for large businesses, issuers retaining reserve interest that partners argue should flow back to them, and governance structures that exclude the companies actually distributing and using the tokens.

Governance for Open USD will sit with a board composed of partner companies rather than a single corporate parent. Organizers describe this structure as a prerequisite for broad adoption, drawing an explicit comparison to how early internet protocols avoided capture by any one commercial entity. Samara Cohen of BlackRock, one of the backers, called the move