A New Economic Model for Stablecoins
In a move that sent shockwaves through the financial technology sector, a consortium of over 140 companies—including giants such as Visa, Mastercard, Stripe, BlackRock, and Coinbase—unveiled a new dollar-pegged stablecoin, Open USD (OUSD), on Tuesday. Unlike the prevailing model championed by Circle’s USDC, which retains interest earned on reserve assets as corporate revenue, Open Standard, the entity behind OUSD, will distribute nearly all reserve yield back to the firms that adopt and distribute the token.
The market reacted swiftly to the announcement. Shares of Circle Internet Group (NYSE: CRCL) plummeted more than 17% on Tuesday, marking their lowest level since February. Analysts suggest this selloff reflects concerns that OUSD’s structure poses a direct, systemic threat to Circle’s primary revenue stream, which generated $1.68 billion in 2024—nearly 99% of the company’s total revenue.
The Strategic Pivot
Open Standard’s founding CEO, Zach Abrams, previously co-founded Bridge—the stablecoin infrastructure firm acquired by Stripe for $1.1 billion. Abrams frames the launch as an “Android moment” for finance, arguing that the industry requires an open, interoperable standard rather than proprietary, closed-loop ecosystems. By eliminating minting and redemption fees and sharing reserve interest proportionally, the coalition aims to incentivize massive adoption across merchant payment networks.
The participation of Coinbase is particularly notable. As Circle’s primary distribution partner, Coinbase earned approximately $908 million in 2024 under a collaboration agreement that expires in August 2026. Coinbase’s dual role as both a key supporter of USDC and a founding member of the OUSD coalition creates a complex conflict of interest that may force a renegotiation of its relationship with Circle.
Regulatory and Technical Risks
Despite the high-profile backing, OUSD faces significant hurdles. Legal experts point to the U.S. GENIUS Act, signed into law in July 2025, which prohibits payment stablecoin issuers from paying interest or yield to holders. While Open Standard may argue its model is a form of “white-label profit-sharing”—a potential exemption under the OCC’s proposed rules—the regulatory outcome remains uncertain. Final implementing rules are expected by July 18, 2026.
Furthermore, OUSD will not be FDIC-insured, and users will lack the government-backed safety net that helped stabilize USDC during the Silicon Valley Bank crisis in 2023. Whether the coalition can maintain governance cohesion among 140 competing entities remains a fundamental, and as-yet-untested, challenge.