Just now! OUSD detonates a nuclear-level stablecoin “three-kingdoms battle.” Behind Circle’s 15% plunge, the real “corpse” turned out to be this.

Let's cut to the chase. Yesterday, the news about OUSD broke, and the stablecoin circle instantly exploded. Market analysis pointed out that this is not a simple product launch, but a reshuffling of the survival landscape for the three major issuers—Circle, Tether, and Paxos. I predicted in advance that Circle's stock price would drop 15%-20% on that day, and it landed right in the middle of that range. This decline is reasonable, but don't rush to bury Circle yet.

Let's first look at Circle, ticker CRCL. While OUSD was officially announced, Circle founder Jeremy was giving a live interview at the Goldman Sachs Digital Assets Summit. Everyone in the audience, including Goldman Sachs executives and most guests, knew the news in advance and understood what it meant for CRCL. During the interview, CRCL's stock price directly dropped 6%. The scene was like playing a wedding march at a funeral—awkward and cruel.

On the business level, several trends have long been clear: channel revenue share ratios continue to rise, and stablecoin redemption fees in payment scenarios will eventually go to zero. Circle has made early moves: finalizing mint-and-redeem agreements with payment companies and negotiating revenue shares with distribution channels. Additionally, if Circle's partnership with Coinbase is terminated, net revenue would almost double. But don't get too excited—this profit will likely flow to a new distribution partner in the end. However, after breaking free from Coinbase's contractual constraints, Circle can fully and aggressively compete for market share, which in the long run outweighs the drawbacks. It also has a deeply integrated, highly liquid underlying system, a core moat that should not be overlooked.

But for many of Stripe's partners and ecosystem participants, as long as OUSD has sufficient liquidity, it is likely to replace $USDC as the default option. Stripe has stronger technology and product implementation capabilities, and will likely launch more comprehensive derivative tools in the future, lowering the barrier to stablecoin integration. However, Circle has first-mover advantages and an existing integration base—although switching costs are not high, you have already built products on Circle's API, and you need sufficient incentives to move, which is harder than imagined.

The incremental blank market is far larger than the existing market. For non-payment applications or payment companies that compete with Stripe, OUSD has no obvious advantage. There is also a key point: if OUSD is ultimately issued by an entity under Bridge, the core pain point that $USDC cannot deeply penetrate large enterprise customers over the long term remains unresolved. Because such stablecoins are essentially credit liabilities of the issuer, and neither Circle nor Bridge has an investment-grade credit rating. Bridge has also not completed the compliance overhaul under the GENIUS Stablecoin Act. Unless Stripe's parent company or another entity provides a backstop guarantee, large banks and asset management institutions are likely to directly enter and seize the most profitable enterprise-level scenarios. There is still a lot of heavy work involved in applying for and obtaining global compliance licenses. So I don't think the launch of OUSD can eliminate industry competition risks.

Circle indeed needs to accelerate R&D iterations for payment and fintech products, possibly through M&A to fill gaps. With the stock price now low, it may have missed the optimal window, but there are still acquisition targets with value-added potential on the market. New entrants will not disappear, so proactively deploying defensive businesses is crucial.

As for Tether? This is not its core market at all. It has been deeply cultivating the down-market that Stripe and Circle don't touch. Tether CEO Paolo said a few years ago at Token 2049 that in the long term, Tether's market share will likely decline, but the entire stablecoin industry scale will explode. Tether is basically unscathed this time.

The real disaster zone is Paxos. The competitive advantage of its core product $USDG has been significantly weakened, and its long-held regulatory compliance leadership is also eroding. The launch of OUSD poses an existential threat to Paxos. This is also the core reason Paxos fully shifted to BaaS business over the past year—it has long been looking for an escape route.

In a nutshell: Circle is bleeding, Tether sits tight, Paxos is dying. This is not the death knell, but the clarion call for a new round of elimination.

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