Open USD poses biggest threat yet to Circle's USDC, CoinShares says
The upcoming launch of 'Open USD' by a consortium of major financial firms poses a potential competitive threat to Circle's USDC stablecoin. Analysts suggest the new model's yield-sharing structure could pressure Circle's margins and influence the broader stablecoin market.
Why it matters
The entry of institutional giants into the stablecoin market could fundamentally shift the economics and regulatory landscape of digital payments.
Unlike traditional stablecoin issuers, who keep the income generated by their reserves, Open USD plans to distribute the yield to participating businesses, retaining only a management fee. CoinShares said the model could squeeze Circle's margins while raising the cost of maintaining USDC distribution.
“If successful, Open USD could push stablecoins further into mainstream payments by making the economics and governance more attractive for the businesses actually using them,” wrote analyst Luke Nolan.
Developed by Open Standard, the institutional-focused stablecoin is backed by a consortium of more than 140 companies, including BlackRock (BLK), Coinbase (COIN), Mastercard (MA), Stripe and Visa (V), and is targeting a second-half 2026 launch. Key details, including its reserve structure and fee model, remain undisclosed.
The model also strengthens Coinbase's hand ahead of the Aug. 18 renewal of its revenue-sharing agreement with Circle, under which the exchange receives roughly half of USDC's reserve income, the report said.
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