Key facts
- Circle CEO Jeremy Allaire stated that USDC's decade-long network of integrations, liquidity, and regulatory infrastructure gives it an advantage over new stablecoins.
- Allaire questioned the long-term sustainability of Open USD's (OUSD) proposed model of permanently free, unlimited minting and redemption.
- Open Standard announced OUSD, which is backed by over 140 companies including Visa, Mastercard, Stripe, Coinbase, BlackRock, and Google.
- Bernstein analysts believe OUSD could be the first significant challenger to the USDC-Tether duopoly.
- Bernstein identified unresolved questions regarding OUSD's governance, operational architecture, and revenue-sharing formula.
Circle CEO Jeremy Allaire has asserted that the established network of integrations, liquidity, and regulatory infrastructure built around USDC provides a significant competitive advantage over new stablecoin entrants. He specifically challenged elements of Open USD's (OUSD) proposed business model, questioning the long-term sustainability of offering permanently free, unlimited minting and redemption, and suggesting that returning nearly all reserve income to partners could hinder necessary infrastructure investment.
This exchange highlights the growing competition in the stablecoin market, with new players like OUSD aiming to disrupt the dominance of Circle's USDC and Tether's USDT by offering greater revenue sharing and governance influence to partners. OUSD, announced by Open Standard, has garnered support from a broad coalition of over 140 companies across payments, banking, technology, and crypto sectors, including major players like Visa, Mastercard, Stripe, Coinbase, BlackRock, and Google, and is slated to launch in 2026.
Analysts at Bernstein have indicated that OUSD could emerge as the strongest new challenger to the existing duopoly, citing its broad industry backing. However, the firm also pointed to unresolved issues concerning OUSD's governance structure, operational framework, and revenue-sharing mechanisms, noting the complexity of coordinating such a large number of partners. Bernstein estimated that scaling a stablecoin network requires substantial resources, referencing Circle's approximate $500 million annual expenditure on marketing, infrastructure, technology, and compliance.
Conversely, Lorenzo Valente, director of research at ARK Invest, expressed skepticism, characterizing the OUSD announcement as a significant letter of intent rather than a fully realized product. He argued that OUSD faces the 'cold-start problem' due to the entrenched liquidity of USDC and USDT within the crypto ecosystem. Valente also noted that many of OUSD's stated partners already support competing stablecoins or possess their own infrastructure, suggesting potential conflicts of interest.