Circle Shares Fall After Open USD Stablecoin Targets USDC
Circle Shares Drop 15% After Open USD Launch – New Consortium Stablecoin Targets USDC Enterprise Model
Key Takeaways
- Circle Internet Group shares fell nearly 15% after Open Standard unveiled the Open USD stablecoin.
- Open USD is backed by more than 140 companies, including Visa, Mastercard, Coinbase, BlackRock, BNY, Google, and Shopify.
- The new token allows businesses to mint and redeem at no cost and lets partners retain reserve earnings after a small fee.
- Reserve interest generated 99% of Circle’s revenue in 2024, according to its filing.
- Open USD will launch later this year on Plasma and other chains designed for stablecoin payments.
Circle Stock Declines Following Open USD Announcement
Shares of Circle Internet Group fell sharply on Tuesday after Open Standard introduced Open USD, a dollar-denominated stablecoin designed for enterprise use. The stock dropped nearly 15% during the session and touched its lowest level of the day following the announcement.
The decline extends a period of volatility for Circle. Earlier this year, the company’s shares rose from 50 dollars to 129 dollars within six weeks. The latest move reverses part of that rally and comes at a time when Circle’s USD Coin remains one of the largest stablecoins in circulation.
Open USD enters a market dominated by Tether’s USDT and Circle’s USDC. According to DefiLlama data cited in the announcement context, USDT has a market capitalization of about 185 billion dollars, while USDC stands near 74 billion dollars.
Open USD Targets the Enterprise Segment Led by USDC
Open USD is positioned specifically for business users, a segment that has supported USDC’s growth in corporate transfers and payment flows. Open Standard states that businesses will be able to mint and redeem the token free of charge. In addition, participating partners will retain the earnings generated from reserve assets after paying a small fee.
This structure contrasts with Circle’s revenue model. According to the company’s filing, reserve interest accounted for 99% of its revenue in 2024. The heavy reliance on income from reserves highlights why changes in distribution or reserve-sharing arrangements can have a direct impact on its financial performance.
Circle also paid Coinbase 908 million dollars in 2024 to distribute USDC. Coinbase has now joined the Open USD initiative, which allows partners to keep reserve earnings. The revenue-sharing agreement between Circle and Coinbase is set for renewal in August, adding a further timing element to the competitive shift.
Consortium Structure Brings Major Financial and Technology Firms Together
Open Standard will oversee the token through an independent board composed of its partners. The initiative is backed by more than 140 companies across finance and technology. Named participants include Visa, Mastercard, Coinbase, BlackRock, BNY, Google, and Shopify.
Zach Abrams serves as interim leader of Open Standard. He previously co-founded Bridge, a stablecoin firm that Stripe acquired for 1.1 billion dollars in 2025.
Stripe has integrated the new token into its payments business. In the announcement, Will Gaybrick, president of technology and business at Stripe, stated that Open USD will serve as the default stablecoin for businesses operating on Stripe. Circle, Tether, and PayPal are not part of the consortium.
Several backers already operate their own stablecoins or provide infrastructure for stablecoin payments. The structure mirrors earlier industry collaborations, including Mastercard’s recent stablecoin payment integrations.
Distribution and Network Access at the Center of Competition
A central issue for Circle is distribution. USDC gained ground in corporate transfers and exchange liquidity, supported by regulatory standing in the United States and Europe. However, Open USD’s backers include major payment networks and financial institutions that process significant transaction volumes.
By aligning payment networks, banks, and crypto firms behind a single token, the consortium seeks to consolidate enterprise payment flows. The combination of minting incentives and reserve revenue retention directly addresses the economic incentives that have supported USDC’s growth.
At the same time, USDC maintains established exchange liquidity and regulatory positioning in key jurisdictions, factors that continue to underpin its use in trading and payments.
Launch Timeline and Market Context
Open USD is scheduled to go live later this year on Plasma and other blockchains built for stablecoin payments. Plasma is described as a chain designed specifically for stablecoin transactions.
The announcement follows previous attempts by major payment companies to collaborate on stablecoin projects. In 2019, Visa, Mastercard, and Stripe supported Facebook’s Libra initiative but withdrew within months amid regulatory pressure. The current consortium represents a renewed effort by similar participants to coordinate around a shared digital dollar token.
With USDT and USDC currently leading the stablecoin market by capitalization, the entry of a multi-company consortium introduces a new competitive structure focused on enterprise users and reserve economics.
Our Assessment
The launch of Open USD directly challenges Circle’s USDC in the enterprise segment by offering free minting and redemption and allowing partners to retain reserve earnings. Circle’s reliance on reserve interest, which accounted for 99% of its 2024 revenue, explains the immediate market reaction in its share price. The involvement of major payment networks, financial institutions, and technology firms consolidates significant distribution capacity behind the new token. At the same time, USDC retains regulatory standing in the United States and Europe and established exchange liquidity, while Open USD is set to launch later this year on designated stablecoin payment chains.
