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Circle Drops 15% After Visa and Coinbase Back Open USD Launch

Visa, Mastercard, and Coinbase’s new dollar stablecoin is putting the most pressure on Circle’s USDC business model. The timing is especially sensitive because the deal with Coinbase is up for renegotiation in August.

By Luc Vesters
• 2 min read
Circle Drops 15% After Visa and Coinbase Back Open USD Launch

Key Takeaways

  • Circle shares fell nearly 15% on Tuesday after Open Standard launched Open USD with support from more than 140 companies.
  • Open USD is aimed at enterprise users and puts pressure on Circle’s business model, since interest on reserves made up 99% of revenue in 2024.
  • For Europe, the key point is that the new consortium stablecoin could sharpen competition for business payments and settlement with USDC.

Circle Internet Group (CRCL) shares slid sharply on Tuesday after Open Standard introduced Open USD (OUSD), a dollar stablecoin backed by more than 140 companies and aimed directly at the market where USDC already has a strong foothold. The group behind it includes Visa, Mastercard, and Coinbase, giving the token support from a wide mix of payment networks, banks, and crypto firms.

Pressure on the USDC Model

Open USD is built for enterprise users, which makes it especially relevant to the same customer base Circle depends on for USDC growth. Companies can mint and redeem OUSD without fees, while partners keep the reserve yield after paying a small fee. That setup puts Circle’s model under real pressure, especially since interest on reserves accounted for 99% of revenue in 2024, according to the company’s filing.

Coinbase’s involvement makes the situation even more notable. Circle paid the exchange $908 million (€797 million) last year to help distribute USDC, but Coinbase now sits inside a rival network that allows partners to keep reserve income. Circle shares fell nearly 15% and touched their intraday low.

Consortium vs. Single Issuer

Unlike many stablecoins that are run by one company, Open USD is governed by an independent board made up of the participating partners. The idea behind that consortium structure is to share both control and economic upside across the member companies. Zach Abrams is leading the company for now; he was previously the cofounder of Bridge, the stablecoin company Stripe acquired in 2025 for $1.1 billion (€1 billion).

The list of supporters stretches from BlackRock and BNY to Google and Shopify. Stripe also connected its payments product directly to the token. In the announcement, Will Gaybrick, Stripe’s president of technology and business, said Open USD should become the standard stablecoin for businesses on Stripe.

Why This Matters for Europe

For European crypto readers, the main takeaway is that USDC already has a strong position in the US and Europe, helped by its regulatory standing and deep liquidity on exchanges. If a consortium backed by major payment networks and tech companies launches its own stablecoin, competition for business payments and settlement could get even tighter. The timing matters even more because Circle’s revenue-sharing agreement with Coinbase is due for renegotiation in August.

Open USD is expected to launch later this year on Plasma and other chains designed for stablecoin payments. The track record for similar partnerships is not especially strong: Visa, Mastercard, and Stripe also backed Facebook’s Libra in 2019, but they exited within months after regulators stepped in.

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