A consortium backed by some of the biggest names in payments, banking, and crypto has unveiled a new dollar-pegged stablecoin network that directly challenges Circle’s business model by shifting the economics of stablecoin issuance from issuers to distributors.
The initiative, called Open USD, is supported by more than 140 companies, including Stripe, Coinbase, Visa, Mastercard, BlackRock, Google, Ripple and BNY, and is expected to launch later this year.
INTRODUCING | Leading Global Payments, Banking Firms Launch the Open USD Stablecoin and Infrastructure
The announcement sent Circle shares sharply lower as investors weighed the competitive threat to USDC, the world’s second-largest stablecoin, and the leading compliant stablecoin globally.
#Circle ($CRCL) shares tumbled more than 17% after a consortium backed by some of THE BIGGEST NAMES in #payments, #banking, and #crypto
unveiled Open USD, a new stablecoin designed to challenge incumbents such as ethereum:0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48.… pic.twitter.com/V5ckwnYlF2
— BitKE (@BitcoinKE) July 1, 2026
Unlike traditional stablecoins like Circle, Open USD will allow participating businesses to keep most of the interest earned on reserves backing the token while eliminating minting and redemption fees. The network will instead be governed by an independent entity known as Open Standard with reserve income shared among ecosystem participants after management costs.
The model represents one of the first large-scale attempts to compete with Circle on economics rather than simply issuing another dollar-backed stablecoin.
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For Circle, reserve income has become the foundation of its business. As higher interest rates boosted earnings from assets backing USDC, the company built a profitable model around issuing and redeeming stablecoins while retaining most of the yield generated by those reserves.
USDT, the largest stablecoin globally, has similar economics where its profits come from managing and deploying of capital reserves across U.S treasuries and other investment vehicles that generate massive revenue returns for the stablecoin issuer.
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Open USD seeks to reverse that equation by giving payment providers, fintechs, and banks a direct financial incentive to issue and distribute the stablecoin themselves.
How the Open Standard Differs from the Circle Payments Network
The announcement is also notable because it targets a different layer of the stablecoin stack than Circle Payments Network (CPN).
The Circle Payments Network is primarily a payment coordination network.
It connects banks, payment providers, and financial institutions to enable cross-border transfers using regulated stablecoins such as USDC. Circle remains the issuer of the stablecoin and continues to control reserve management while earning the associated interest income.
Open USD, by contrast, is designed as a consortium-owned stablecoin ecosystem. Rather than focusing primarily on payment messaging and settlement, it changes ownership of the underlying economics by allowing distributors to share reserve revenue while removing minting costs altogether.
In effect:
Circle Payments Network Open USD Uses existing stablecoins, primarily USDC Introduces a new consortium-backed stablecoin Focuses on payment rails and cross-border settlement Focuses on stablecoin issuance economics Circle retains reserve income Reserve income is shared with participating businesses Circle remains the central issuer Governance is distributed through Open Standard Expands USDC adoption Seeks to create an alternative stablecoin ecosystem
The emergence of Open USD reflects growing competition over who captures the economic value created by stablecoins as regulators increasingly provide legal frameworks for digital dollars.
Rather than competing solely on technology or payment infrastructure, the next phase of the market may be determined by which network offers banks, fintechs, and payment providers the strongest financial incentives to participate.
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