Open Standard has launched Open USD, a new stablecoin network backed by three industry heavyweights — Stripe, Coinbase, and BlackRock — with a fundamentally different economic model than Circle's USDC. The key differentiator: Open USD lets partner institutions keep the reserve income generated by backing assets (essentially the float yield), and strips out minting fees entirely. Circle's USDC model, by contrast, retains much of that reserve income for itself, which has been the core of its revenue since rate hikes supercharged yield on cash and T-bill reserves.
Circle's shares fell 13% on the news, a sharp single-session move that reflects how existential this threat is perceived to be. USDC is the second-largest stablecoin globally, and Circle's entire IPO thesis rests on USDC volume, reserve yield, and ecosystem growth. Coinbase is particularly notable here — it has been a key USDC distribution partner through the Centre Consortium — and its pivot to also backing Open USD signals that the relationship with Circle is no longer exclusive.
The second-order tension is significant: if major on-ramps like Coinbase and payment rails like Stripe route flows through Open USD rather than USDC, Circle loses both volume and the reserve float that powers its financials. BlackRock's involvement adds a layer of institutional credibility that could accelerate enterprise adoption of Open USD at the expense of USDC.
For Coinbase itself (COIN), the picture is more nuanced. COIN reported a 526% net margin on $247M revenue (FY2025), which already reflects a high-yield crypto-market environment. If Coinbase can capture a share of Open USD's reserve economics that it previously passed to Circle, this could be incrementally positive for COIN's top line — though COIN's revenue is also highly correlated to crypto trading volumes, which is a separate driver.
What to watch: Circle's IPO timeline and revised valuation, Open USD's adoption rate among payment processors and exchanges, and whether Circle responds with a competing fee structure or reserve-sharing model to defend its partner network.