Circle Stock Plummets 15% as Visa, Mastercard Back New Stablecoin Rival OUSD
Circle's stock took a 15% nosedive as Open Standard launched Open USD (OUSD), a stablecoin backed by giants like Visa, Mastercard, and Coinbase. This new contender directly targets USDC's lucrative enterprise market, threatening Circle's primary revenue stream from reserve interest. The move signals a major shake-up in the stablecoin arena, with significant implications for market dominance.
Circle's stock cratered 15% after Open Standard unveiled Open USD (OUSD), a stablecoin backed by a consortium of over 140 companies including Visa, Mastercard, and Coinbase. This new entrant is gunning straight for the enterprise users that have fueled USDC's growth, a move that directly challenges Circle's core business model. OUSD offers free minting and redemption, with partners keeping reserve earnings after a small fee, striking at the heart of how Circle generates revenue, which was 99% from reserve interest in 2024. The launch is particularly stinging as Coinbase, a key USDC distributor, is now backing a rival that lets partners pocket those same earnings. This competitive pressure comes at a critical time, with Circle's revenue-sharing deal with Coinbase up for renewal in August. While USDC still boasts regulatory advantages and deep exchange liquidity, the sheer weight of OUSD's backers, spanning major payment networks and tech firms, poses a significant distribution threat. The ghost of Facebook's failed Libra project, also backed by many of these same players, looms large, but OUSD's focused approach on enterprise adoption could prove more resilient.