New entrant in the stablecoin race: Will the OUSD alliance disrupt the current stablecoin industry landscape?
On June 30, 2026, stablecoin firm Open Standard announced the launch of a new U.S. dollar-pegged stablecoin, Open USD (OUSD), backed by an alliance of over 140 major players spanning traditional finance, payments, technology, and cryptocurrency sectors. The announcement triggered significant market volatility, with shares of Circle—the poster child for U.S.-compliant stablecoins—plummeting 17.55% on the same day.
This event represents more than just ordinary commercial competition; it signals an emerging new model in stablecoin issuance: shifting from a centralized model where issuers exclusively retain profits from reserve yield-generating assets to a consortium-based, profit-sharing model that redistributes reserve earnings and offers rebates to distribution partners. This article will provide an in-depth analysis of the current stablecoin landscape, OUSD’s profit-allocation mechanism, the foundational logic behind Circle’s valuation model, and the defensive moats enjoyed by stablecoin pioneers.
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Current global stablecoin landscape: USDT and USDC dominate
The global stablecoin market has long been dominated by a duopoly: USDT issued by Tether and USDC issued by Circle. Although both maintain a 1:1 peg to the U.S. dollar, they differ significantly in terms of reserve transparency, regulatory compliance, use cases, and ecosystem barriers.
As the original pioneer in the stablecoin space, USDT’s core advantage lies in its unmatched trading liquidity and extremely high penetration in both primary and secondary markets. USDT is primarily active in global offshore cryptocurrency trading networks and emerging markets operating at the edge of regulation. Data shows that in asymmetric payment markets of emerging economies such as Venezuela, USDT accounts for as much as 90.2% of retail peer-to-peer transaction advertisements—far surpassing other similar assets.
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By contrast, USDC issued by Circle represents the highest standards of compliance and integration with onshore financial systems. USDC’s reserve assets consist entirely of cash and U.S. Treasury securities—primarily allocated through Circle’s reserve fund managed by BlackRock—and are custodied by Bank of New York Mellon, a systemically important bank, with monthly independent audits conducted by top-tier accounting firms.
This compliance advantage has made USDC the primary compliant gateway for traditional institutional capital entering Web3. As of early 2026, although USDC’s circulating market cap (approximately $73–80 billion) remains below that of USDT, it commands roughly 64% of the adjusted on-chain stablecoin transaction volume globally—surpassing USDT since 2019 to become the most efficient on-chain dollar settlement channel worldwide.
OUSD’s Alliance-Based Yield and Revenue-Sharing Model: Lethal Disruption Driven by Reversed Incentives
Open USD (OUSD), launched by Open Standard, represents a novel attempt to restructure the profit distribution model currently employed by existing stablecoin issuers.
In the traditional model, whether Tether or Circle, core profitability stems from the net interest spread between interest-free liabilities and interest-bearing assets. OUSD’s key competitive edge lies in completely dismantling this profit monopoly by introducing a reversed engine that shares yield profits among alliance members. However, beneath the gentle veneer of an independent, decentralized alliance, its underlying architecture reveals strong centralized corporate control:
Source: Open Standard official website, PYMNTS – 'Open USD and the Questions 140 Logos Don’t Answer'
For payment processors like Stripe and Adyen—handling hundreds of billions of dollars in annual transaction volumes—or card networks like Visa and Mastercard, promoting OUSD means converting otherwise forfeited float interest, previously captured solely by issuers, into tangible revenue on their own balance sheets. This incentive mechanism rapidly fuels a powerful ecosystem flywheel, which is precisely why market reactions have been so intense, triggering a sharp decline in Circle’s share price.
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Early Alliance Trust Fracture: South Korean Corporations Collectively Clarify the Incident
Although OUSD’s economic model is theoretically highly attractive, it faced a severe credibility crisis shortly after launch. On July 3, 2026, media outlets including South Korea’s Chosun Ilbo reported that prominent Asian companies listed by OUSD as part of its initial group of 140 partners—including Samsung Electronics, Dunamu (parent company of Upbit), Shinhan Financial Group, and K Bank—issued collective clarifications.
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Representatives from South Korean firms stated that Open Standard had only conducted informal verbal inquiries and unilaterally included their trademarks and names in promotional materials without any signed formal agreements or confirmed partnership details. Some companies only realized they had been listed as alliance members after seeing media reports. This type of marketing tactic—akin to 'credit borrowing' or 'riding on others’ popularity,' widely frowned upon in financial circles—quickly triggered strong market skepticism regarding OUSD’s governance seriousness and compliance integrity. It also exposed significant friction and uncertainty in coordinating an alliance composed of over 140 major players with conflicting interests and complex competitive relationships. For a stablecoin industry fundamentally built on trust, such gray-area marketing left an extremely negative first impression.
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Is Circle’s Valuation Narrative Shaken: Crypto Market Infrastructure Builder or Merely a Tool Sensitive to Interest Rate Volatility?
OUSD directly targets the most vulnerable aspect of Circle’s valuation model: its heavy reliance—94% to 99%—on interest income from reserve assets. When the Federal Reserve enters a rate-cutting cycle, Circle’s revenue shrinks due to declining U.S. Treasury yields, even if transaction volumes grow, exhibiting a classic 'volume growth without revenue growth' sensitivity to interest rates. Therefore, Circle must prove it is not merely a passive spread-earning conduit but a crypto infrastructure giant with high moats.
Vertical Integration Strategy: Transitioning from Spread Dependency to Ecosystem-Based Fee Revenue
To counter threats from profit-sharing competitors, Circle is accelerating the implementation of three strategic pillars aimed at achieving end-to-end vertical integration:
– Expansion of the Circle Payments Network (CPN): Circle is focused on increasing the share of on-platform transactions. Unlike USDC reserves held on third-party exchanges—which require profit sharing with those platforms—funds retained within Circle’s internal network generate 100% exclusive profit for Circle. Recent data shows that the share of CPN platform transactions has surged from 6% in the prior quarter to 17.2%.
– Development of Arc, an independent Layer 1 blockchain: To address the technical bottleneck of USDC being forced to rely on external public blockchains and incurring high gas fees, Circle has announced the launch of its proprietary chain, Arc. The Arc blockchain aims to natively use USDC/EURC as its base utility tokens, directly capturing transaction fees and MEV (Miner Extractable Value) revenue at the network level, thereby fundamentally shifting its revenue model from interest-rate-driven to network-traffic-driven.
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– Strategic positioning in the AI agent micropayment standard (Agent Stack): Circle is making significant investments in the AI agent economy, aiming to position USDC as the settlement currency of choice for future machine-to-machine (M2M) transactions, which could scale to trillions of dollars.
Coinbase’s delicate balancing act: Alliance and multi-pronged hedging
Within Circle’s ecosystem, Coinbase—the largest cryptocurrency exchange in the U.S.—plays a pivotal role. The two companies co-founded the Centre Consortium in 2018 to issue USDC. Although the consortium was dissolved in 2023 (with Circle reclaiming issuance rights and Coinbase receiving equity in Circle), they continue to operate under a critical three-year profit-sharing agreement. This agreement will reach its renewal negotiation point in August 2026. However, Coinbase has simultaneously made a high-profile announcement joining the OUSD alliance as one of its 140 founding members. The market widely interprets this move as a strong hedging strategy and a negotiating lever, posing a direct threat to Circle’s valuation logic.
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– Potential leverage enhancement: Ahead of contract negotiations, Coinbase demonstrates its ability to shift its Base chain and trading pairs toward OUSD at any time, pressuring Circle to concede a larger share of USDC profits during renewal talks.
– Multi-pronged hedging: Coinbase does not want to be left out of future dominant payment rails, so it is hedging its bets—on one hand advancing its perpetual futures platform, set to launch on July 21 with USDC as the primary collateral, and on the other maintaining flexibility to pivot toward the OUSD network.
First-mover advantage and network moat: Circle CEO’s counterargument
In response to market panic triggered by OUSD in capital markets, Jeremy Allaire, co-founder and CEO of Circle, published a detailed article on July 1, delivering a precise technical rebuttal against OUSD and all consortium-based stablecoin models from the perspectives of system architecture and network effects.
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Counterargument One: The liquidity deadlock of unlimited, fee-free, two-way conversion under extreme scenarios
OUSD promises to waive minting and redemption fees regardless of transaction size. Allaire notes that while this commitment holds in theory, it is highly vulnerable to collapse during periods of extreme market volatility. The actual hard-peg redemption capability of a stablecoin critically depends on the issuer’s credit lines and real-time clearing efficiency with top-tier clearing banks across multiple global jurisdictions.
In the event of a systemic liquidity crisis or a deliberate, large-scale, high-frequency redemption attack by competitors against OUSD, Open Standard would be forced to absorb substantial costs related to trade hedging, interbank clearing, and emergency liquidity provisioning. Without any fees or barriers in place, the issuer could easily become a 'costless arbitrage exit channel' for other crypto entities, leading to unsustainable levels of capital advance requirements and accumulated credit risk.
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Counterargument Two: Full profit distribution leads to chronic underinvestment in system-wide public infrastructure
The OUSD model claims to return nearly all reserve earnings to distribution partners. Allaire argues that this design overlooks the fact that a stablecoin is an extremely capital-intensive and compliance-intensive long-term infrastructure project.
USDC spends hundreds of millions of dollars annually on global regulatory licensing (such as MiCA authorization and GENIUS Act federal compliance certification), transparent reserve auditing ecosystems, multi-chain smart contract security, and deep operational integration with global clearing banks. If all reserve spreads are distributed externally, the issuing entity (Open Standard) would lose the capital accumulation necessary to continuously invest in security, compliance, and technological development, resulting in chronic undernourishment of the underlying financial rail when facing technological upgrades.
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Counterargument Three: Inevitable decision-making paralysis in a 'multi-party governance alliance'
Allaire cites Circle's historical experience operating the Centre Consortium and the collapse of Meta-led Diem (formerly Libra) as cautionary precedents. When a stablecoin system is jointly governed by more than 140 major institutions that directly compete in their respective domains and hold fundamentally conflicting interests, the agility of committee decision-making declines exponentially.
In today’s fast-evolving crypto regulatory landscape, a massive alliance plagued by slow decision-making and internal interest fragmentation possesses far less agility and resilience compared to a single-entity issuer model with clear ownership and well-defined accountability. For example, Paxos launched USDG—a similar revenue-sharing consortium stablecoin—18 months ago, yet its circulating supply remains around $3 billion, negligible compared to USDC’s $73–80 billion scale, clearly illustrating the significant hurdles coalition-based models face in cold starts and ecosystem expansion.
Image source: Pandofinance
A New Era of Incremental Market Growth Through Full Infrastructure Integration of Traditional Finance
The announcement by Open USD of its launch and successful coalition of 140 major players from traditional finance, payments, and technology carries profound macroeconomic significance—not in the short-term disruption of the liquidity moats established by USDC or USDT, but in sending a clear and irreversible turning-point signal to global capital markets: traditional financial giants are no longer content merely serving as 'downstream users' and 'reserve custodians' of stablecoins. Instead, they are proactively, strategically, and assertively engaging in reshaping the foundational infrastructure of stablecoins and the rules governing profit allocation.
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