Circle Internet Group shares fell more than 17% on Tuesday to a four-month low, closing below $63 and extending the stock's slide to 55% from its mid-May peak, after a consortium of more than 140 companies — including Stripe, Coinbase, Mastercard, Visa and BlackRock — unveiled a rival stablecoin called Open USD.
The launch is the most direct threat yet to Circle's core business. Circle's USDC stablecoin, with roughly $73 billion in circulation, generates the vast majority of its revenue by retaining interest earned on the U.S. Treasuries backing the coin. Open USD is designed to undercut that model from day one.
What happened
The new stablecoin is issued by an independent company called Open Standard, led by Zach Abrams, co-founder of Bridge, the stablecoin infrastructure firm Stripe acquired in 2024. Beyond its marquee backers, the consortium includes BNY, Standard Chartered, DBS, U.S. Bank, Shopify, Google, IBM, Fireblocks, Anchorage Digital, MetaMask, Aave, Solana, Polygon and Ripple. Open Standard says partner businesses can mint and redeem Open USD for free with no volume caps, and reserve interest income will be shared among partner companies — not captured by a single issuer — minus a management fee, governed by a board drawn from those same partners.
Coinbase's involvement is especially awkward for Circle. The exchange is both a key Circle ally — Circle paid Coinbase more than $900 million in 2024 for distributing USDC — and now a backer of a rival network, raising questions about how long that partnership holds. Coinbase shares also fell roughly 6% on the news.
Why it matters
Circle CEO Jeremy Allaire pushed back on the threat, saying, "Stablecoins represent one of the largest market opportunities in the world... We welcome continued innovation and competition in the space." But analysts see real risk in the backer list. Dragonfly's Rob Hadick called it "a real threat to Circle's business," though he cautioned that "consortiums are hard and they break easily" — a nod to history: Visa, Mastercard and Stripe all backed Facebook's Libra stablecoin in 2019 before abandoning it within months under regulatory pressure.