PayPal Opts Out of $300B Stablecoin Consortium Backed by Visa, Mastercard
PYPL•PayPal is not participating in Open USD, a new stablecoin initiative backed by Visa, Mastercard, Stripe, BlackRock and Coinbase alongside major banks and tech firms. Open USD will distribute nearly all reserve income to partners, challenging incumbents Circle and Tether and potentially sidelining PayPal from shared stablecoin revenue.
1. PayPal Not Participating in Open USD Initiative
PayPal is one of the major issuers absent from the Open USD consortium, which includes Visa, Mastercard, Stripe, BlackRock, Coinbase and several leading banks and tech companies. This exclusion leaves PayPal on the sidelines of a project targeting the $300 billion stablecoin market.
2. OUSD Reserve Income-Sharing Model
Open USD’s structure shares nearly all reserve-generated revenue with distribution partners, minus a minimal management fee. This contrasts with Circle and Tether, which retain most income from their stablecoin reserves, potentially making OUSD more attractive to adopters.
3. Potential Impact on PayPal’s Crypto Strategy
By not joining Open USD, PayPal may miss out on collaborative revenue opportunities and network effects in the fast-growing stablecoin sector. The decision raises questions about PayPal’s future stablecoin plans and competitive positioning.
4. Regulatory Backdrop for Stablecoins
The launch coincides with advancing US stablecoin legislation, including the CLARITY Act moving toward a Senate vote and the GENIUS Act establishing federal reserve standards. These rules could shape Open USD’s compliance and adoption compared to existing players.
