TL;DR:
- Circle faces a new competitor: Open USD (OUSD), backed by more than 140 companies, including Visa, Mastercard, Stripe, Coinbase and Google.
- The company’s shares fell 17.55% following the OUSD announcement, though they recovered part of their losses in Wednesday’s pre-market trading.
- Bernstein noted that OUSD could be the most serious challenge to the USDC-USDT duopoly, but warned about governance and revenue-sharing issues.
Circle is facing its most ambitious competitor in years. Open Standard announced the launch of Open USD (OUSD), a stablecoin backed by more than 140 companies in payments, banking, technology and the crypto sector, including Visa, Mastercard, Stripe, Coinbase, BlackRock and Google. The token is expected to begin operations at some point in 2026.
Circle’s CEO, Jeremy Allaire, responded quickly. In a post, he argued that the ten years of integrations, liquidity, banking relationships, regulatory approvals and reserve management underpinning USDC create structural advantages that are difficult to replicate. For Allaire, stablecoin networks function as platform businesses driven by network effects, and building that infrastructure requires sustained investment over time.
We’ve had lots of questions from our investor community looking for thoughts on OUSD, and so I thought I’d share my direct views here for anyone.
Stablecoin networks are platform and network effect businesses that are established over a long period of time, tend towards…
— Jeremy Allaire – jerallaire.arc (@jerallaire) July 1, 2026
Circle Questions the OUSD Model
The executive also questioned two pillars of the model proposed by OUSD: the promise of free and unlimited minting and redemption, which he considered unsustainable at scale, and the return of nearly all reserve income to partners, which in his view risks “starving the infrastructure of resources”.
The market reaction was immediate. Circle’s shares closed Tuesday at $62.63, registering a decline of 17.55% compared to the previous session. In Wednesday’s pre-market trading, they recovered 2.44%, reaching $64.18, according to Yahoo Finance data.
The Cold-Start Problem for OUSD
Bernstein analysts described OUSD as the most formidable challenge the Circle-Tether duopoly has faced to date, but warned that coordinating more than 140 partners represents a considerable undertaking. The bank noted that Circle allocates approximately $500 million annually to marketing, infrastructure, technology and regulatory compliance, a reference to the scale of resources required to operate a competitive stablecoin network.
Lorenzo Valente, director of research at ARK Invest, adopted a more skeptical stance. He noted that OUSD still faces the cold-start problem posed by the consolidated liquidity of USDC and USDT, and described the announcement as a “massive” letter of intent.
Valente also pointed out that several of the founding partners back rival stablecoins or are developing their own infrastructure: Stripe owns Bridge, Coinbase is closely tied to USDC, banks are building their own deposit tokens and card networks support any available token.
