Circle Stock Falls 16% After Open USD Stablecoin Consortium Launches – Analysts Aren’t Worried

TLDR

• Circle stock fell over 16% after the Open Standard consortium launched Open USD, a new stablecoin backed by Stripe, Coinbase, Visa, Mastercard, and BlackRock
• Unlike USDC, Open USD plans to share reserve income with partner companies rather than keeping it for the issuer
• Analysts at William Blair called the selloff an overreaction and reiterated an Outperform rating on Circle
• A comparable consortium-backed stablecoin, Paxos’ Global Dollar, has only reached $3 billion in supply versus USDC’s $73 billion
• Key details about Open USD remain unclear, including which blockchains it will launch on and how reserve income will be split

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Circle shares dropped more than 16% on Tuesday after a new stablecoin consortium called Open Standard went public with its Open USD project.

Circle Internet Group, CRCL

The group includes over 140 companies. Stripe, Coinbase, Visa, Mastercard, and BlackRock are among the biggest names on the list.

Open USD’s core pitch is straightforward. Instead of the stablecoin issuer keeping the interest earned on reserves, Open Standard would distribute that yield to participating businesses.

That directly challenges how Circle makes money. Circle’s business model is built on holding the interest earned from assets backing USDC.

Circle CEO Jeremy Allaire responded on social media, calling USDC “the most trusted, widely adopted, institutional-ready stablecoin in the world.” He said Circle would keep building and welcomed competition.

Tether CEO Paolo Ardoino also weighed in, writing: “Welcome OUSD. Player 2 has entered the game.”

Analysts Say the Selloff Went Too Far

Not everyone thinks the threat is as serious as the stock drop suggests.

Analysts at William Blair kept their Outperform rating on Circle and said investors should treat Tuesday’s decline as a buying opportunity.

They called competitive concerns “overblown,” pointing to USDC’s roughly $74 billion market cap and Circle’s existing payments infrastructure.

The analysts also compared Open USD to past payment consortiums like MCX and Paze, which failed to gain traction against established networks.

Owen Lau, managing director at Clear Street, agreed the reaction was too sharp. “I think it is an overreaction,” he told CoinDesk.

Rob Hadick at venture firm Dragonfly said the partner list does present a real threat but warned that consortiums are hard to maintain. “Incentives are broad and often misaligned,” he said.

Big Questions Remain Unanswered

Analysts also pointed out that Open Standard’s announcement left out key details.

It did not clearly state which blockchains Open USD will launch on, how reserve income will be divided among partners, or what the ownership structure looks like.

Columbia Business School professor Omid Malekan called it the “logo spray and pray” phase. “Putting your name on a list is easy,” he wrote. “Actually changing corporate behavior is hard.”

For comparison, Paxos launched its consortium-backed stablecoin in late 2024. It has reached $3 billion in supply — far behind USDC’s $73 billion and Tether’s $145 billion.

The announcement also brought attention to Circle’s existing deal with Coinbase, which is reportedly up for renewal in August.

Open USD is expected to launch later in 2026. Until then, its real impact on USDC’s market share remains unknown.