After the launch of Open USD, Circle's stock price fell by over 16%. Analysts say competition concerns are exaggerated.

BlockBeats News, July 1 — Circle’s stock fell more than 16% on Tuesday after Open Standard announced the launch of Open USD, a new stablecoin backed by more than 140 companies such as Visa, Stripe, Mastercard, BlackRock, and Coinbase. Investors are assessing the competitive threat it may pose to USDC. William Blair analysts said the sell-off was an overreaction and reiterated their “outperform” rating on Circle, adding that investors should treat the drop as a buying opportunity. Analysts Andrew Jeffrey and Adib Choudhury said competition in the stablecoin market is “inevitable,” ultimately confirming the industry’s potential. They believe concerns about competition have been exaggerated and pointed out that USDC’s market cap of about $7.4 billion, deep liquidity, and stablecoin payment infrastructure such as Circle’s payment network keep Circle in a favorable position.

The two analysts also expressed skepticism about Open Standard’s claims. Open Standard said Open USD will launch later this year and will share most of its reserve yield with participating companies. But William Blair analysts believe Circle has already offered similar incentives to partners, and that OUSD is “a solution in search of a problem.” They also compared Open USD with past payment alliances such as MCX and Paze, saying these alliances have struggled to gain effective traction against established networks.

Circle CEO Jeremy Allaire posted on X, saying that USDC remains “the most trusted, most widely adopted, and most institutionally ready stablecoin globally.” He said Circle will continue to expand its ecosystem among banks, payment companies, capital market firms, and enterprises, while providing partners with more ways to become “economic stakeholders” in USDC network growth. Tether CEO Paolo Ardoino also said on social media: “Welcome OUSD, player 2 has entered the game.”