Open USD reserve-sharing model threatens Circle's 73B stablecoin moat

A consortium of more than 140 companies including Visa, Stripe and BlackRock launched Open USD on July 4, a stablecoin that shares reserve yield with partners — a model that threatens Circle Internet Group's dominance in the $280 billion stablecoin market.

"Open USD will be the default stablecoin for businesses running on Stripe," Will Gaybrick, president of technology and business at Stripe, said.

Open USD allows businesses to mint and redeem the stablecoin at no cost with no volume limits, while distributing reserve earnings back to partners after deducting a small management fee. The model directly challenges Circle, which generated $2.63 billion of its $2.75 billion in total revenue in 2025 from reserve yield on its USDC holdings, according to company filings. Circle's stock fell 17 percent following the announcement, dropping from $73 to $62 on June 30, before paring some losses.

The stablecoin market remains dominated by Tether's USDT at $184 billion in circulation and Circle's USDC at $73 billion, according to DefiLlama data. Together they control more than 80 percent of the market. Open USD's economics could incentivize major payment platforms and fintech firms to switch allegiance, potentially eroding Circle's revenue base. The stablecoin is set to go live later this year, with governance managed by an independent board composed of its partners.

How Open USD's economics differ from USDC

The key structural difference lies in who captures the yield. Under the current model, Circle earns interest on the U.S. Treasury reserves backing each USDC token and keeps the vast majority — $2.63 billion of $2.75 billion in 2025 revenue came from reserve yield. Open USD redirects that yield to the businesses that integrate the stablecoin, keeping only a small management fee for the Open Standard consortium.

The consortium includes payment giants Visa and Mastercard, tech firms Google, Samsung and Shopify, crypto exchanges Coinbase and Crypto.com, and traditional financial institutions BlackRock, Standard Chartered and BNY. Coinbase's participation is notable given it was one of the original forces behind USDC and still shares revenue from USDC with Circle. Stripe's president explicitly committed to making Open USD the default stablecoin for its payment network.

Can Open USD break the duopoly?

Previous challengers have struggled to gain traction. PayPal launched PayPal USD in 2023 and has issued only $2.75 billion in tokens since then, according to market data. Open USD's backer list is deeper than any previous competitor, but questions have already emerged about the scope of its partnerships, with Samsung and Dunamu saying they are partners despite initial claims, according to reports.

The consortium is led by former Coinbase product lead Zach Abrams as founding CEO. Open Standard operates under a collaborative governance model through an independent board composed of its partners. The venture's ability to coordinate decisions across 140-plus organizations — including competing banks, payment processors and crypto firms — will be a key test of its viability.

The launch also comes as European MiCA regulations took effect on July 1, requiring stablecoin issuers to hold licenses in the European Union. Only 12 percent of crypto firms complied by the deadline, according to the Financial Times, and Revolut plans to delist Tether's USDT on Aug. 1 over compliance concerns. Open Standard has not disclosed its regulatory strategy for the EU market.

For Circle, the threat is existential. If Open USD captures even a fraction of USDC's $73 billion supply, the impact on Circle's revenue would be direct and immediate, given that reserve yield accounts for 96 percent of its revenue. Circle's stock has recovered some of its initial losses but remains below its pre-announcement level.

This article is for informational purposes only and does not constitute investment advice.