Circle Shares Plunge 15% After Visa, Mastercard, and Coinbase Back Competing Stablecoin
Circle Internet Group (CRCL) shares took a sharp hit on Tuesday following the announcement of Open USD (OUSD), a new dollar-pegged stablecoin launched by Open Standard and supported by a coalition of more than 140 companies. The backer list reads like a who's who of finance and technology — Visa, Mastercard, Coinbase, BlackRock, BNY, Google, and Shopify are all part of the consortium. The new token directly targets the enterprise segment where Circle's USD Coin (USDC) has built its strongest foothold.
The launch effectively unites major payment networks, traditional banks, and crypto firms under a single competing product — arriving at a moment when USDC and Tether's USDT already dominate the stablecoin landscape.
**A Business Model Under Attack**
What makes Open USD particularly threatening to Circle is not just the competition for users, but the economic model behind it. Businesses joining Open Standard can mint and redeem the token at no cost, while consortium partners retain earnings generated by the stablecoin's reserves, minus a modest fee. This arrangement strikes directly at Circle's core revenue stream.
According to Circle's own regulatory filing, reserve interest accounted for 99% of the company's revenue in 2024. That year, Circle paid Coinbase $908 million to distribute USDC to users. Now Coinbase has switched sides, joining a rival framework that lets partners keep exactly those reserve earnings rather than sharing them with Circle.
Circle's stock dropped nearly 15% on the news, hitting its intraday low and extending what has been a turbulent stretch following an earlier rally that took shares from $50 to $129 over just six weeks.
**Who Is Behind Open Standard?**
Open Standard will be governed by an independent board made up of its partners. The company is currently led on an interim basis by Zach Abrams, who previously co-founded Bridge — the stablecoin infrastructure firm acquired by Stripe for $1.1 billion in 2025.
Stripe's involvement goes beyond a simple endorsement. According to an excerpt from the launch announcement attributed to Stripe's president of technology and business, Will Gaybrick, Open USD is set to become "the default stablecoin for businesses running on Stripe." That kind of deep integration gives the new token a significant distribution advantage from day one.
Open USD is planned to launch later this year on Plasma and other blockchain networks optimized for stablecoin payments.
**Circle Still Has Cards to Play**
Despite the pressure, Circle is not without defenses. USDC carries established regulatory recognition in both the United States and Europe, and it benefits from deep liquidity across major cryptocurrency exchanges. The token also recently surpassed Tether in corporate transfer volumes — a milestone that signals real-world enterprise trust.
However, Open USD's backers include the very payment networks that process much of that corporate transaction flow, making the distribution challenge hard to ignore. Making matters more urgent, Circle's revenue-sharing agreement with Coinbase is set for renewal in August — a negotiation that now takes place in a very different competitive environment.
**History Offers a Cautionary Note**
Not everyone is convinced the consortium model will succeed. A relevant precedent exists: in 2019, Visa, Mastercard, and Stripe all signed on to support Facebook's Libra stablecoin project, only to withdraw within months once regulatory scrutiny intensified. Open USD faces a different regulatory climate today, but the memory of Libra's collapse serves as a reminder that broad industry coalitions can unravel quickly.
For now, Tether's USDT remains the market leader at approximately $185 billion in circulation, with Circle's USDC holding roughly $74 billion. Open USD enters a crowded field — but with unusually powerful backing behind it.
