#OUSDStablecoinLaunch


Over 140 Companies, Including Circle’s Own Partners, Launch a Competing Stablecoin. Circle Stock Plunged 17.5% Same Day. The entire stablecoin market may have just undergone one of the biggest structural shifts since the launch of USDC, according to one executive.

More than 140 financial institutions - including Visa, Stripe, Mastercard, BlackRock, BNY Mellon and Coinbase - came together to launch the Open Dollar (OUSD) project, which is aimed squarely at the infrastructure and payment use case within institutions.

The stock of circle, USDC’s issuer, dropped 17.5% on Tuesday, to $62.63. In fact, OUSD is differentiated from other rival stablecoin challengers because its consortium isn’t starting from scratch, with many participants serving as existing service providers to Circle itself. “BlackRock, Circle’s own reserve manager, BNY Mellon, its custody provider and largest partner, and Coinbase, the largest USDC distributing exchange and revenue partner… not competitors who have to build distribution from scratch. They’re building on the existing structure to divert it into another model,” one executive close to the launch told CoinDesk.

The economic model for Circle is directly threatened because the company currently makes approximately $3.5 billion annually by holding the interest generated by its USDC reserves.

OUSD offers no minting or redemption fees, and 100% of its Treasury interest revenue is distributed to network participants. Circle CEO Jeremy Allaire argues that USDC’s existing network effect due to first-mover advantage will continue to win, citing the fact that Facebook and Amazon did not compete on the stablecoin front with their own projects, but instead adopted USDC. However, critics say OUSD’s approach is different since the network effect participants are the ones who control the existing network’s reserves and distribution.

OUSD is expected to go live in the second half of 2026. For now, the challenge is still theoretical. The outcome will largely hinge on Circle’s Q2 earnings report on Aug. 18, as well as the potential for Coinbase to leverage the situation.

One day of a 17.5% drop for Circle is not the whole story, but it does reflect current market sentiment.

#GateSquare #Stablecoin @Gate_Square
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· 37m ago
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· 52m ago
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· 52m ago
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· 52m ago
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