Open USD is set to introduce a new business model that could significantly impact Circle's USDC by shifting the reserve income distribution away from issuers. CoinShares reports that if successful, this new stablecoin could alter the competitive dynamics in the stablecoin market.
Open USD's Collaborative Model
Backed by over 140 companies, including major players like BlackRock, Coinbase, and Mastercard, Open USD plans to debut in the latter half of 2026. Unlike traditional stablecoins, which retain reserve income, Open USD intends to share this income with its partners, potentially reducing Circle’s profit margins. This innovative approach could make Open USD more appealing for businesses looking to use stablecoins for payments.
Impact on USDC and Market Dynamics
Circle’s USDC has seen its circulating supply decline from nearly $80 billion in March to around $73 billion, indicating a loss of market share amidst increasing competition from newly regulated issuers. Following the announcement of Open USD, Circle's stock experienced a drop of over 17%, although CoinShares suggests that this may have been exacerbated by technical selling linked to the Russell index reconstitution.
Despite the emerging threat of Open USD, CoinShares emphasizes that USDC benefits from established liquidity and solid integrations with various platforms in the DeFi space and payment systems. These advantages may prove challenging for Open USD to replicate in the initial stages of its rollout.
This material is informational and should not be considered financial advice.
