A sudden wave of uncertainty hit Circle after the Open Standard alliance unveiled Open USD (OUSD), a revenue-sharing stablecoin designed to redistribute reserve income among its partners. The announcement in late June shaved roughly 15% off Circle’s share price, as investors quickly repriced the durability of the company’s reserve-income moat. OUSD is backed by a coalition of 140 participants that includes Visa, Mastercard, Stripe, and Coinbase, positioning it not as a niche token but as a competing network that challenges the core business model of existing stablecoin issuers.
Revenue Sharing Strikes at the Heart of Circle’s Model
Circle’s revenue engine is built on holding fiat-backed stablecoins and capturing the yield on reserves. With USDC’s circulating supply above $70 billion, that interest income is predictable and substantial. OUSD turns this logic on its head by offering zero-fee minting and redemption while distributing reserve income to ecosystem participants. If Stripe and Bridge—the stablecoin startup Stripe acquired—succeed in routing payment flows through this stack, the pressure on Circle won’t come from market share loss alone. It will come from the need to match revenue-sharing terms just to retain distribution partners. Making such rev-share agreements public and central to the product transforms what was once a backroom commercial term into a competitive weapon. Meanwhile, Circle’s push into payment services like its Arc platform has yet to show up meaningfully in earnings, so any squeeze on the core yield model lands directly on the company’s valuation.
A Shaky Membership List
The 140-member roster initially lent OUSD considerable credibility, but cracks appeared quickly. Several named firms, including Samsung Electronics and K Bank, stated they had not held formal talks with the OUSD issuer and were surprised by their inclusion. One company learned of its membership from Korean media reports. This suggests that Open Standard’s list may lean heavily on existing Stripe partners who were folded into the narrative rather than active OUSD collaborators. While Bridge is doing the heavy lifting and Stripe’s distribution reach is genuine, building network trust akin to Visa’s card infrastructure is a decades-long process. The near-term threat of disintermediation for USDC remains limited, but the direction is clear.
Segmentation Is the Real Long Game
The OUSD move clarifies that stablecoin demand is splitting along regulatory, geographic, and functional lines. USDT continues to dominate less-regulated markets, USDC holds regulated institutional corridors, and OUSD aims at enterprise payments and Stripe’s merchant ecosystem. For Coinbase, which appears in both the USDC and OUSD camps, the calculation is purely about distribution breadth. If a rival stablecoin ecosystem grows incremental volume without cannibalizing USDC, it adds a strategic option. Regulatory clarity will accelerate this segmentation, with frameworks like MiCA, pending U.S. stablecoin legislation, and Asian licensing regimes carving out zones where different business models become viable.
Jeremy Allaire’s Vision of Invisible Stablecoins
Amid these competitive pressures, Circle CEO Jeremy Allaire offered a longer-term vision: stablecoins will become most important precisely when they become least visible. He argues that trading is no longer the primary use case, and payments and capital markets are the next arenas for adoption. This view follows Circle’s approval to establish First National Digital Currency Bank, which received final clearance on July 10 from the Office of the Comptroller of the Currency. The charter gives Circle a regulated foundation for turning stablecoins into financial plumbing, allowing institutions to treat digital dollars as routine cash rather than crypto products.
Regulatory Timetable and Unresolved Conditions
The invisible future has a regulatory timetable. The GENIUS Act, signed in July 2025, requires full reserves and monthly disclosures, with implementation due by January 18, 2027. Allaire acknowledged that Circle must evolve its fiduciary and regulatory systems, while competitors continue advancing. A consortium coin is already pressuring USDC yields, Europe is testing a digital euro, and delayed bank adoption could keep digital dollars tied to the crypto world longer than expected. The battle is not for today’s issuance—it is for which model captures the next wave of enterprise and AI-agent payment flows.
