Open Standard, an independent issuer backed by Stripe, Coinbase, BlackRock, Visa and Mastercard, will hand almost all reserve yield to the partners that distribute it — a direct assault on Circle's economics.
Circle Internet Group shares closed 17 per cent lower on Tuesday after a consortium of more than 140 payments, banking and crypto firms announced Open USD, a rival dollar stablecoin explicitly designed to strip the reserve-yield economics out of the incumbent business. The launch entity — Open Standard — will distribute nearly all interest earned on its Treasury-bill reserves back to the companies that mint, hold and redeem the token, and it will charge nothing to move in and out.
Every serious name in the stablecoin conversation is on the partner list. Stripe, Coinbase, BlackRock, Visa, Mastercard, BNY, Standard Chartered, DBS, U.S. Bank, Shopify, Google, IBM, Fireblocks, Anchorage Digital, MetaMask, Aave, Solana, Polygon and Ripple all signed on before the announcement. Zach Abrams, who co-founded the Bridge stablecoin platform Stripe bought in 2024, takes the interim chief executive role. The token itself is expected to go live later this year across Solana, Stellar, Base and Polygon.
The pitch is precise. USDC and USDT built empires on the float — the money that sits between a customer paying in dollars and Circle or Tether investing those dollars in short-term Treasuries. At $150 billion in circulation and current bill rates, USDC alone earns Circle several billion dollars a year in interest income the company keeps almost entirely. Open USD says: give that money to the distributors instead. Shopify, Visa, Coinbase — the businesses actually moving the coin — collect the yield in proportion to the balances they hold or route.
That is not a marketing gimmick. It is a structural rebuttal to how stablecoin issuers make money. The GENIUS Act, which Congress passed in 2024 and is due to be fully in force by 18 July, bars issuers from paying yield directly to holders. The workaround the industry has quietly settled on — partners get paid via distribution deals, retail users get nothing — is exactly what Open Standard has now formalised into a shared cap table. That approach came under scrutiny earlier this month when the FinCEN-OFAC AML rule for stablecoin issuers closed for comment with the banks lobbying hard against the current shape of the framework.
Circle's response has been that scale and switching costs matter more than reserve economics. USDC has real merchant integrations, real settlement rails, and a national trust bank charter granted by the OCC in December for its First National Digital Currency Bank entity. Getting a new stablecoin to $10 billion in circulation is a hard, slow process — Circle's own path from zero to $150 billion took eight years and a great deal of luck. The company has been aggressive about expanding its footprint recently, having just launched cirBTC on Ethereum to attack the wrapped bitcoin market.
Investors did not care about that argument on Tuesday. Circle stock had already been under pressure from concerns about USDC's growth trajectory and the launch of Coinbase's own branded stablecoin USDF in May. Tuesday's fall took the drawdown from the mid-June high to more than 25 per cent. Ark Invest researcher Frank Downing wrote that the reaction looked overdone — Open USD still needs to prove it can hit meaningful volume — but that is a hard case to make against the sight of Visa, Mastercard and BlackRock together on a term sheet.
Tether, notably, is not on the partner list; neither is JPMorgan Chase's Kinexys arm. The absence of the two largest incumbents is either a sign that Open Standard did not want a taint of concentration risk on its cap table, or a sign that Tether and JPMorgan did not want to hand yield to their own customers. Either read is unflattering to somebody.
The Open USD announcement lands into a stablecoin sector that already looks nothing like it did eighteen months ago. Western Union launched a dollar coin on Solana in early May with Anchorage as issuer. Coinbase branded its own with USDF. MetaMask launched mUSD alongside its new Money Account product on the same day Open USD was unveiled. Every one of those products is optimised around a different theory of who captures the reserve yield — the exchange, the wallet, the payment network, or, now, the partner consortium.
The interim CEO's history is instructive. Abrams built Bridge specifically to hide the underlying stablecoin from merchant customers — the plumbing that let Stripe move dollars on-chain without asking anyone whether they wanted USDC or USDT. Open USD is the next logical step: if the plumbing is what matters, then the token itself should be a commodity, and the yield should flow to whoever runs the pipe.
