Circle Defends USDC Model as Open USD Attracts Partners
Circle is sticking with free USDC redemptions, while Open USD and USDG share reserve income with partners. That keeps the battle over stablecoin distribution and payments heating up.
Key Takeaways
- Circle says USDC redemptions will stay free and are usually processed within two business days.
- Open USD and USDG share reserve income with partners to encourage adoption and distribution.
- Competition for stablecoin revenue could affect visibility in wallets, payment flows, and exchanges.
Circle is defending its USDC model as rivals try to attract partners with a bigger share of reserve income. The crypto company says the costs of redemption, compliance, and reliability do not disappear just because the issuer does not pass them on to partners. At the same time, Circle is also looking for more distribution partners itself, while the fight over stablecoin revenue in the sector keeps heating up.
Circle Sticks With Free Redemptions
Circle said standard USDC redemptions will remain free and are usually handled within two business days. For qualified platform customers and payment flows through Circle Payments Network, near-real-time redemptions are now also available at no cost, the company said.
That message came after Circle responded on social media to the growing competition around stablecoin distribution. The company did not mention Open USD directly, but the timing makes it clear that the debate is about who keeps the yield from reserves and who shares it with partners.
Open USD and USDG Put Pressure on Circle
Open USD, or OUSD, went live on September 30 as a dollar-pegged stablecoin from Open Standard, a consortium with more than 140 companies, including Visa, Mastercard, Stripe, BlackRock, and Coinbase. The model differs from traditional stablecoins because almost all reserve income goes back to the partner network, minus a small management fee. OUSD runs natively on multiple blockchains, including Ethereum, Solana, Base, and Tempo.
The Paxos-led Global Dollar Network uses a similar approach with USDG. In that network, reserve income is shared with partners to encourage adoption. Arbitrum joined that ecosystem on October 6, showing that the competition for distribution is not just about users, but also about infrastructure and partnerships.
Why This Matters for Europe
For European crypto readers, this matters because stablecoins are increasingly being judged on their business model, distribution, and use in payments. The battle between issuers that keep the revenue themselves and networks that share that revenue could affect which stablecoins show up in wallets, payment flows, and exchanges. That makes the competition around USDC, OUSD, and USDG interesting outside the United States too.
Earlier, the renewal of the USDC deal between Coinbase and Circle already showed how important distribution and revenue sharing are for Circle’s position in the market.
