Circle, the company behind the USDC stablecoin, watched its stock drop nearly 16% on the day, closing near $63.99, after Coinbase, Visa, Mastercard, Stripe, BlackRock and more than 140 other firms unveiled a rival stablecoin called Open USD (OUSD). The selloff has pushed Circle's shares down 39% over the past month, according to Yahoo Finance data.
At a Glance
- Circle (CRCL) shares fell about 16% to roughly $63.99 on the news
- Stock is down 39% over the trailing month
- Open USD backed by 140+ firms including Coinbase, Visa, Mastercard, Stripe, BlackRock
- New coin run by independent operator Open Standard, led by CEO Zach Abrams
- Open USD targeted to launch later this year
What Open USD Is Trying to Fix
Open Standard, the newly formed entity steering the project, says it wants to solve problems that have followed stablecoins as they've scaled up: steep costs to mint and redeem tokens in bulk, issuers keeping the interest earned on reserves for themselves, and governance that leaves out the businesses actually moving money through these coins.
Under the new structure, companies can mint and redeem Open USD without fees and without volume limits. Interest earned on the reserves backing the coin would flow to partner firms instead of staying with a single issuer, after a management fee is deducted. Control of the project rests with a board made up of partner companies rather than one corporate owner, a setup organizers argue is necessary to get widespread buy in.
Zach Abrams, who previously started Bridge before Stripe acquired it, put the rationale plainly in a statement: current stablecoins work well in some respects, but scaling them requires something open, cheap to use, capable of high transaction volume, widely accessible, and structured to serve the interests of the businesses relying on it.
Who's Behind It
The roster of participants is notably broad. Payment networks Visa, Mastercard and American Express are involved, alongside banks such as BlackRock, BNY and Standard Chartered. Tech companies including Google and Shopify have joined too, as have crypto firms Coinbase and Ripple. Coinbase's involvement is notable given its close ties to Circle as a USDC partner, yet the exchange is backing the competing project anyway.
Executives are pitching Open USD as neutral, shared infrastructure, comparing it to how the early internet was built without a single gatekeeper. BlackRock's Samara Cohen called the launch