A consortium led by Visa, Mastercard and Coinbase with over 140 firms has unveiled Open USD, a U.S. dollar-pegged stablecoin that lets businesses mint and redeem tokens for free while retaining reserve interest minus a small fee. Circle’s USDC market share, roughly 25%, faced new competition as its shares slid about 14% on concern over lost reserve interest revenue, which accounted for 99% of its 2024 income.
A new stablecoin named Open USD has been unveiled by a consortium of over 140 businesses including Visa, Mastercard and Coinbase. The token is pegged to the U.S. dollar and allows partners to mint and redeem without fees while retaining most reserve interest after a small management charge.
Circle’s USDC faces pressure as its shares fell roughly 14% following the announcement, driven by concerns that reserve interest revenue—which generated 99% of its 2024 income—could shift to Open USD participants. The loss of fee income and upcoming renewal of a $908 million distribution deal with Coinbase in August heightens uncertainty over Circle’s earnings.
Stablecoins total about $313 billion in market cap, with Tether’s USDT commanding 62% and USDC around 25%. The enterprise-focused Open USD launch under the new regulatory framework could reshape how reserve yields are distributed and accelerate institutional adoption when the token goes live later this year.
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